Sir Tim Clark (shades) and Alan Joyce exchange loyal customers: file photo

If Australia’s frequent flyers thought like investors or financial analysts the news this week would be pretty good.

Qantas is kicking them hard in sensitive places with changes to its program that makes being loyal look idiotic, but allows it to save money breaking its promises to frequent flyers (except that the fine print in its loyalty program makes it clear it doesn’t actually have any obligation to do anything.)

Virgin Australia is telling those who get hot flushes about alliances like Star or Oneworld to take a cold shower, or grow up and pay up.

And Emirates can’t help itself when it comes to pointing out the generosity of Qantas in sending so many of its customers to it for free, a point it has made several times in recent weeks, suggesting that being an idiot isn’t confined in Qantas to its more gullible customers.

Thinking about what alliances, partnerships and loyalty programs mean from the perspective of someone trying to make money out of flying, or in the case of analysts, trying to make money out of selling shares,  is probably a fairer but nevertheless painful way of adjusting to these disclosures than hurling angry tweets or insults at misunderstood managers.

“Free” and “loyal” are words from the previous golden age of entitlement.  It is totally unreasonable to expect any airlines, anywhere, to keep their word when they have been pitchforked into a deregulated world of mass travel where anyone can, and increasingly does fly.

The new words are ‘data base marketing’ and ‘selling opportunity’. If we wanted to be perverse, Qantas might be criticised for holding on to what was the world’s best frequent flying program of all time for as long as it did.

In the writer’s former household, it was the credit and charge card payments for monthly phone bills, office supplies, tradesperson services, furniture purchases, hotel rooms, and entertainment charges at costly restuarants paid for by vanished print media empires or as family enterprise tax deductions, that earned massive and generous redemptions for Qantas flights back when Qantas flew to places it doesn’t fly to today.

The duty of loyalty customers today is to pay over the top for groceries or petrol so that by about 2214  ‘reward’ upgradable tickets for two can be granted if a couple first buys full economy fares and rocks up to the airport two hours before departure and begs.

Sarcasm aside, what is happening in all airlines, and Qantas to its credit has been a genuinely generous hold out so far as this is concerned,  is that the words ‘loyal’ and ‘free’ are having their meanings changed irrevocably.

Your loyal duty now is to be screwed, and fly Emirates if possible because your patronage for the Qantas product just keeps costing it money.

Spare a thought for Qantas management today. It is perforce rendering its main money earner, the frequent buyer flyer scheme so unattractive that it won’t be able to spin it off to separate shareholders for anything like the price it needs to get in lieu of the audacious but unsuccessful attempt to get the Abbott Government to give it a $3 billion unsecured loan.  And eventually, the value of a reward scheme that doesn’t reward on a frequent or reliable basis, will fall, dragging down the FFP Co investment, as well as taking from Qantas something that used to be a real source of value to its owners.

The Qantas program could still be the best in the world. But the best that was in ‘best’ is no longer as ‘best’ as it was, and the question in a market where even Qantas can make you a better offer for a fare than it can for the frustrations and costs of getting one of its ‘reward’ fares is ….Why bother?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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