Qantas Made $2.5b from Frequent Flyers?! Help Us Fix The System (Survey inside)

AssociatedLehsanm61 @ The University of Melbourne on 23/05/2025 - 15:26
Last edited 23/05/2025 - 20:55 by 2 other users

We’re a group of Uni of Melbourne marketing students doing an academic project (not some corporate spin job) on how frequent flyer programs could actually give value back to customers.

Let’s be real - Qantas earned $2.5 billion from its loyalty program last year, more than Jetstar made flying people. Virgin’s not far behind. They keep devaluing points, flying fewer rewards, and giving back… what exactly? Even the Senate had to step in.

NOTE: Qantas Frequent Flyer is a high-margin business that generated A$2.5 billion in FY2023–24 by selling points to partners like banks and retailers, profiting from unused or low-value redemptions, and leveraging member data—making it more profitable than Jetstar and contributing nearly 12% of Qantas Group’s total revenue.

So if you’re a QFF, Velocity, Emirates or KrisFlyer member (or just rage-scrolling after failing to find reward seats), we want your help. This survey takes 5–7 mins, is anonymous, and your voice might just be the spark for change.

https://q.surveys.unimelb.edu.au/jfe/form/SV_8iSuBGyFyqu2rHw

As fellow OzBargainers, we’ve also found 5 redemption sweet spots that are still worth your points in 2025:

✈️ Qantas RTW Business: 318k pts = $15k+ trip
🛏️ Emirates First to NZ: 62k pts = onboard shower + bar
💺 Virgin Qsuite to Europe: 139k pts = $6k+ value
🍷 Domestic Biz (Virgin or Qantas): ~35k pts = 3–4c/point
🛌 Singapore Suites: 85k KF miles = luxury sky bed
Let’s make our loyalty actually worth something. 💳💥

P.S. We’re not affiliated with any airline. Just tired of getting toaster vouchers for 400k points.

Mod: Approval given for post after discussion with OP.

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Comments

  • jv on 23/05/2025 - 15:29
    +4

    Help Us Fix The System

    How is doing a survey going to fix it?

    • CommanderCrumbcake on 23/05/2025 - 15:33

      By raising awareness…….. or something

      • jv on 23/05/2025 - 15:34

        Why didn't someone think of that before? 😲

        • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 20:51
          +1

          Thanks jv, there was senate enquiry in 2023 into FPP, we don't believe still they are doing enough!

  • dahax77 on 23/05/2025 - 15:39
    +1

    You aren't going to change a thing. Loyalty programs aren't about customers. Wasting your time.

  • DOGGYWOWWOW on 23/05/2025 - 15:40
    +2

    Let’s be real - Qantas earned $2.5 billion

    Not defending Qantas but that's revenue not profits.

    Qantas group (including frequent flyer program and Jetstar) only made a profit of $1.25 billion last financial year.

    • Neilzy on 23/05/2025 - 15:51
      +3

      Thats a nice tidy amount. Perhaps they can start to pay back some of their COVID welfare payments now

    • ryefig on 23/05/2025 - 15:54
      +1

      only made 1.25 billion profit?

      • MrThing on 23/05/2025 - 18:01

        about to lose $121 million of that in their current court case

    • Ponsonby on 23/05/2025 - 20:22
      +1

      OP needs to fix the title of the post

  • ihbh on 23/05/2025 - 15:51
    +1

    Qantas Made $2.5b from Frequent Flyers… Qantas earned $2.5 billion

    Just like Woolworths made A$67.92 Billion from their shops, etc.

    … revenue you noobs, not earnings.

    PS: Walmart's was $680.98bn - that's USD.

    • Drakesy on 23/05/2025 - 18:12

      Yeah it's only $344 million in profit for Qantas.

  • Ozbar Gain on 23/05/2025 - 15:56
    +2

    You can qantas out

  • Drakesy on 23/05/2025 - 17:45
    +1

    Coming from someone with 700k QFF points and struggling to get to europe with them this summer (don't have platinum/gold status with One world, only Star Alliance) it's literally a joke.

    I was Oneworld gold for a year and had a plethora of business and economy seats to choose from, now i'm lucky to find an overpriced classic rewards seat in economy. no Qantas i don't want to burn 200,000 points and $1000 to go one way in economy class, i could buy a seat outright on Qatar for less.

    Meanwhile Star alliance availability before and after status is miles better.

    • MrThing on 23/05/2025 - 18:01

      classic reward

      you mean classic plus right

      • Drakesy on 23/05/2025 - 18:10

        Yeah, whatever the crap program is.

        Also realised it's really only $344m in profit.
        Uni students need a lesson in finance.

        • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 20:49
          -2

          Thanks Drakesy, re your point, in FY'24 Qantas had $2.5b revenue from frequent flyer which was more than entire Jetstar revenue! See below page 21. Qantas International EBIT was only $556m with 6.4% margin while loyalty program itself generated $511m EBIT with around 20% margin.

          https://investor.qantas.com/FormBuilder/_Resource/_module/do…

          • ihbh on 24/05/2025 - 09:00

            @ehsanm61: Another business lesson for you guys and gals.

            Services that don't require a lot of capital (think planes) usually earn a much higher return. Small per transaction businesses can earn usually a much higher margin (the net and gross amounts don't matter much/make a difference to the customer).

        • jv on 23/05/2025 - 20:53

          Uni students need a lesson in finance.

          Give them a break, they are doing an Arts degree…

  • MrThing on 23/05/2025 - 18:00
    +2

    Krisflyer

    Singapore airlines (krisflyer) actually have premium reward availability….thats the big difference between it and Qantas

    Oh and singapore airlines isn't a terrible airline selling a budget airline product for a premium price

    • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 20:46
      -1

      Thanks, very interesting insight. With limited competition in Australia, it’s no surprise that airlines like Qantas and Virgin offer relatively little back to customers. During a recent panel interview, a couple of expats from the US mentioned they regularly fly to Australia using American Airlines points they’ve accumulated throughout the year—earning points on almost everything, even rent payments.

  • barge-in hunter on 23/05/2025 - 19:19

    “Fix the system”?

    A lot of that revenue came from selling users data. Buying habits, socio economic modelling, market trends, etc.

    The system can be fixed by either:
    1) making it illegal to sell user data for commercial purposes, or
    2) enough people leaving the ff program

    Good luck.

    • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 20:42

      Thanks Barge. They also recognise significant revenue (and profit) in their books from unused and expired points. I agree—QFF’s 16.5 million members likely make it one of the largest consumer databases in Australia albeit there is no information/transparency how much they are earning buy selling data.

  • Baysew on 23/05/2025 - 20:21
    +1

    Let’s be accurate.

    Qantas Loyalty continued to perform strongly in FY24 with a record Underlying EBIT of $511 million

    Group profit, that's everything (flying, points) was not even $2.5 Billion.

    The Group achieved an Underlying Profit Before Tax of $2.08 billion and a Statutory Profit After Tax of $1.25 billion for the year ending 30 June 2024.

    • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 20:34

      Thanks, EBIT (Earning before income tax) is revenue minus all other operational cost including interest payment. Qantas had $2.5b revenue from frequent flyer which more than entire Jetstar revenue! See below page 21. Qantas international EBIT was only $556m with 6.4% margin while loyalty program itself generated $511m EBIT with around 20% margin.

      https://investor.qantas.com/FormBuilder/_Resource/_module/do…

  • sumyungguy on 23/05/2025 - 20:57

    Just did your survey. It's pretty skewed towards your agenda… but you are undergrads so all is forgiven.

    • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 21:02
      -1

      Thanks summyunguy, the intent was to help with some recommendations to improve the value for frequent Flyer consumers in Australia.

      • sumyungguy on 23/05/2025 - 21:07
        +3

        You've failed to factor in how members earn points and status. Qantas has been moving to a model where status is everything and I don't have an issue with that. But you seem to believe if a member has points they should be entitled to redeem them for maximum return. I don't agree, Qantas isn't a benevolent institution. If I was your assessor you'd be getting at best a mediocre grade.

  • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 21:26
    -1

    I totally agree with your point of view. Most of people these days shopping around to find the cheapest and most convenient flights so they are not accumulating enough points to move to higher tiers. With point expiring etc, means except loyal customers with higher status there is no/very little value which also diminishing by further devaluation of points. In more competitive markets like EU and US, these programs providing lots of value to even customers in lower-tier while here is not! Thanks for feedback though.

    • sumyungguy on 23/05/2025 - 21:40
      +3

      You don't appear to understand how status is attained; and Qantas points practically don't expire. So you're doing an assignment built on outrage about the profitability of Qantas Loyalty?

  • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 21:46

    You are right, the status comes from loyalty to airline or accumulation of points through their partners like credit cards. My point was people may not be loyal to airlines simply because of their loyalty program unless they can get the benefit out of that and not wait for years to get to next tier. The hypothesis we are working is more frequent and in smaller chunks will create higher perceived value for customers. Like how Woolies reward or Flybuys giving away some perks or $10 credit more frequently and more often. This is not a great direct comparison but why people for example should choose these days credit card solely because of QFF link rather than choosing these days lowest cost/interest one.

    • sumyungguy on 23/05/2025 - 21:53
      +2

      Nope, still not right about status or what drives loyalty to Qantas.

  • DingoBilly on 23/05/2025 - 22:27

    I make a ton of money from QFF points. I'm really happy with it tbh, basically $5k a year for free.

    • Associatedehsanm61 @ The University of Melbourne on 23/05/2025 - 22:42

      Thanks DingoBilly, any tips for rest of us to do the same? No doubts QFF by far is the most valuable loyalty program 6c/point while others giving away a fraction of that.

  • gee-man on 24/05/2025 - 09:31
    +2

    I used to work for one of the big programs, and was involved in the points calculation process.

    Think of loyalty programs as a broker between airlines selling inventory and businesses buying points. They can only offer you what’s available, and airlines employ a heck of a lot of smart people to minimise the number of free seats on any plane. This will naturally restrict the number of reward seats available, and airlines will always sell seats for the most possible cash before they make it available to loyalty, this is visible to us as Fare Classes.

    So it pays to consider (most) loyalty programs as a tool that helps companies clear out excess stock at some value, rather than an altruistic reward mechanism. Because as soon as that plane takes off those seats are worth zero, and anything is better than nothing.

    Also, it pays to be honest about numbers you put up in this context. Call it out as revenue or profit, but don’t be click-baity.

    • OZBargainer in SA on 24/05/2025 - 10:04

      I'm not saying it was deliberate in this case, but click baiting is a form of marketing.

      • Associatedehsanm61 @ The University of Melbourne on 24/05/2025 - 12:31

        Thanks OzBargainer in SA, maybe we can finally get extra points! 😀

    • Associatedehsanm61 @ The University of Melbourne on 24/05/2025 - 12:29

      Thanks, Gee-man! Appreciate the insight. Unfortunately, there isn’t much public information available about how exactly these programs generate revenue. As you mentioned, there’s some trading and brokering of the points. It might be a naive assumption, but we believe these points remain as liabilities on the accounting books until they’re either redeemed or expired.

      Expired points would then be recognized as profit, minus the cost of acquiring them — for example, through transfers like Woolies Rewards to QFF. So, there’s a significant incentive for these loyalty programs to encourage consumers to transfer or earn points. Making them hard to redeem might not be the primary strategy, but as you said, there’s likely a considerable effort involved in finding the right balance.

      • gee-man on 24/05/2025 - 12:47

        You’re generally right, the points value $ is kept in a trust and there are a few methods used to ‘burn’ points, both when they’re redeemed by the customer, over time as they sit unused, and when they eventually expire. Generally points aren’t expired until 3+ years after your last activity, so they’re not aggressive about that (and they don’t really have to be).

        While I was there the biggest earner for airlines was redemption on international business class tickets. Otherwise, the higher the fare class, the better. That’s why they encourage saving points over time.

  • Associatedehsanm61 @ The University of Melbourne on 24/05/2025 - 15:18

    Thanks again for sharing the insight, this will definitely help us better frame the issue and potential recommendations. Arm’s length transactions are also a very interesting area, especially in terms of how they might balance potential lost revenue by allocating reward seats on popular routes. We’ve heard many customers complain about the unavailability of reward seats, even when booking a year in advance.

    • gee-man on 24/05/2025 - 15:38

      Think about airline inventory as buckets within buckets, that all drain into the more expensive buckets as the inventory level drops. The cheapest fares and reward seats are there to ensure the plane is as full as it can be. If the revenue management team thinks the plane will be full or oversold, they won’t even allocate reward seats, or just a handful. It’s the unpopular city pairs and weird times that will see the most reward seats.

  • ol mate on 24/05/2025 - 16:07

    💺 Virgin Qsuite to Europe: 139k pts = $6k+ value

    158,500 points since the recent devaluation.

  • Waltervp on 24/05/2025 - 16:57

    Ive had issues with redemption flights not actually being 'issued' despite me having all the proof and paperwork and not getting our flights, missing out on holidays. Thats happened a few times but i think that was a glitch they no longer have.

    Its the qantas club that is awful, the rules and regulations often get me caught up in believing i should have access or privilege when i don't etc… like having less luggage allowance on one leg of a trip, or no access to a lounge for a daft reason. I dint fly that often and its mostly for medical reasons i need it, hence very expensive if not flying all that much

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