How to Maximise Your Qantas Frequent Flyer Points

Hello everyone,

I found a really interesting article on Qantas Frequent Flyer point. It's long but it's worth a read for Qantas Frequent Flyers members. I have copy and pasted the article from https://flightfox.com/strategy/maximise-your-qantas-frequent…

Understanding how to maximise your Qantas Frequent Flyer points is no small feat. We make it simple, by explaining the best (and worst!) ways to spend your points.
Let's face it, the Qantas Frequent Flyer program is complex. Purchasing flights or merchandise with points is not always better value than paying with cash, once you factor in high taxes and fees. So, how do you know when it is valuable to purchase with points, and when you're better off paying the retail price instead?

Qantas Frequent Flyer Program
Understand the Value of Points
When using your points to pay for a flight or a product, you are effectively converting them into cash (Aussie Dollars). You need each point to have a high cash value, so that you can use the least amount of points for each purchase.

What does that mean? Points are valued in Cents Per Mile (CPM), with a 'mile' referring to a Qantas 'point'. To determine the 'cent' value of each point (i.e. CPM), you need to look at the number of points required to purchase on the Qantas website versus the current AU$ price in the market place.

So, when is the CPM value favourable?

Use a Benchmark
Tim Winship, of FrequentFlier, estimates a favourable exchange rate to be 1.4 US Cents Per Mile. This is based on the average price for a US domestic flight ($350), versus how many miles you would need to buy the flight with (25,000).

Take off a bit, to account for the hassle of using miles, and 1.2 CPM is a good benchmark for US miles redemption.

US$ 350 vs. 25,000 miles + $0 taxes/fees = 1.4 CPM

Qantas, on the other hand, charges higher fuel fees than the American airlines (mostly due to a lack of competition), which needs to be factored into our CPM calculations.

A short return flight from Sydney to Melbourne or Brisbane to Sydney generally costs AU$ 200 in total, but if you want to pay with your points instead you have to pay the taxes and fees on top.

AU$ 200 vs. 16,000 points + $70 taxes/fees = 0.81 CPM

At the Qantas Store 3,500 points can be swapped directly for $100 cash, in the form of a Myer or David Jones Gift Voucher.

10,000 cents ÷ 3,500 points = 0.74 CPM

Use 0.74 cents as a benchmark value for one Qantas point
Calculate the Minimum Value of Your Qantas Points
Enter Your Total Points: at 0.74 CPM = Min. Value AU$ 148.00
We've created a simple check that you can do right here. Enter in the total number of Qantas points you currently have and we'll show you the minimum value that you should exchange them at.

The Best Way to Use Your Points
Using your points for an upgrade yields by far the best points to cash exchange rate. Before paying for anything, you first must check if there is an upgrade available for the flight you want (the easy and free way to do this is to just call and ask Qantas). If you fly a lot you may want to invest in a subscription on ExpertFlyer.

Qantas Airways
Domestic Round-Trip: Sydney - Melbourne Upgrade
Purchase a Discount Economy Cash Fare (Red e-Deal) for AU$ 234, then 16,000 points to upgrade from Discount Economy to Business. The Business Class Fare costs $1,140 and you earn 2,000 points back for purchasing the Economy seat.

AU$ 1,140 vs. 14,000 points + AU$ 234 = 6.47 CPM

You're essentially getting a Business class seat that's worth $1,140 for $338 (by valuing your points at 0.74 CPM and adding Discount Economy seat at $234).

This works even better if you buy an Economy fare (rather than Discount Economy). These are not the Red e-Deals or Sale fares, they're called Flexi Saver or Fully Flexible on the Qantas site. You pay more in cash for this type of fare, but you don't have to use as many points, so the ones you do use you're exchanging at a more favourable rate.

AU$ 1,140 vs. 8,000 points + AU$ 578 = 7.03 CPM

International Round-Trip: Sydney - Los Angeles Upgrade
Again, after confirming that there is an Upgrade Award available on the flight you want, purchase a seat, a Red e-Deal is currently showing $2,556. Before purchasing, read the fine print in the Fare Type to make sure your seat can be upgraded (Sale and some Red e-Deals are not eligible). For a Red e-Deal (aka Discount Economy) you need 144,000 points to upgrade to Business, but you also earn 14,982 back when you fly (even more if you have Silver, Gold or Platinum status). The Business Class Fare (on Sale) costs $7,406.

AU$ 7,406 vs. 129,018 points + AU$ 2,556 = 3.76 CPM

It's better if you buy a Premium Economy seat and upgrade to Business with points.

AU$ 7,406 vs. 71,272 points + AU$ 3,598 = 5.34 CPM

Even better is if you're willing to fork out the cost of a Business Class seat and upgrade with points to First Class.

AU$ 17,356 vs. 67,526 points + AU$ 7,406 = 14.74 CPM

After upgrades, the next best use of your Qantas points is to purchase a Business Classic Award, for either an international or domestic flight.

Domestic Round-Trip: Sydney - Melbourne Business Award
Search the Qantas site for an available Business 'Classic Award'. These are pretty easy to find for domestic trips. It will cost you 32,000 points and $70 in taxes and fees (it works out better to pay taxes and fees in cash, not in points).

AU$ 1,140 vs. 32,000 points + AU$ 70 = 3.34 CPM

However for these Classic Awards, you don't earn any points so we can include this in the calculation as your points foregone.

• 2,500 points foregone = 3.1 CPM

International Round-Trip: Sydney - Los Angeles Business Award
It costs a whopping 192,000 points to redeem a Business Classic Award on the popular SYD-LAX route and to return.

AU$ 7,406 vs. 192,000 points + AU$ 896 in taxes/fees = 3.39 CPM

• 22,474 points foregone = 3.04 CPM

A quick comparison with American Airlines for this exact same route: it only costs 125,000 points and roughly AU$ 140 in taxes and fees! Is it time to switch programs…?

The Worst Way to Use Your Points
You can see there is a large value gap between using points to upgrade, and exchanging them directly for cash (such as for the $1,000 Gift Voucher).

My recommendation to you is to avoid the Qantas Store. The exchange rate is terrible, 99% of the time. There are some outliers, the 'Special Offers', where the points have been slashed significantly, but these are few and far between and won't give the same level of CPM as flights.

Qantas Airways
Shop the Qantas Store
$100 David Jones or Myer Gift Voucher costs 13,500 points = 0.74 CPM
iPad Mini (16GB Wifi) will cost you 59,000 points, and retails at $359 = 0.61 CPM
iPad Mini paid with Points + Pay is worse. 35,400 points + $187 cash = 0.5 CPM
Samsonite 77cm Suitcase is worth $399. Special Offer 34,000 points = 1.17 CPM
Economy Flights
You may not have any desire to fly business, even if it makes your points worth more. You may wish to use points on economy flights instead. Be warned though, the CPM value is likely to be low.

For this reason, Economy sale prices are often far better value. Using points is only worthwhile if current fare prices are high (last minute, for example).

How to Value Your Own Points
Let's get technical and subjective at the same time. We're going to value our points according to what we think something is worth (completely disregarding market prices). Let's be honest, I simply would not pay $1,140 to fly Business domestically, let alone $7,406 for international. Would you?

To understand the real value of your points, you need to understand what you would be willing to pay for something, regardless of market prices. What amount of money would you realistically pay to fly Business Class? Double the Economy fare? Somewhere close to that? And what about First-Class?

Here's what I would pay…

Domestic Round-Trip: Sydney - Melbourne in Business
The Economy sale fare is $234, and I'd pay roughly double to fly Business = $470.

AU$ 470 vs. 32,000 + AU$ 70 = 1.25 CPM

• 2,500 points foregone = 1.16 CPM

My points are valued more than my benchmark of 0.74 CPM, which means the value is good. Not as good as it was when I considered paying $1,140 for Business Class (4.6 CPM), but we're in the black.

International Round-Trip: Sydney to Los Angeles in Business
I would pay less than double the Economy sale fare ($1,498) to fly in Business, at a limit of around $2,500.

AU$ 2,500 vs. 192,000 + AU$ 896 = 0.84 CPM

• 22,474 points foregone = 0.75 CPM

The CPM is just equal to the benchmark, but far below the 3.04 CPM I received when I valued flying Business Class at $7,406.

International Round-Trip: Sydney to Los Angeles in First
The Economy sale fare is $1,498. I would pay double to be wined and dined in First.

AU$ 3,000 vs. 288,000 + AU$ 896 = 0.73 CPM

• 29,965 points foregone = 0.66 CPM

The CPM is way less than the benchmark. Poor value for me and but far below the 5.18 CPM value I got when accepting a First-Class fare is worth $17, 356).