Frequent flyers given a boost
THE ability of Qantas frequent flyers to earn so-called "status credits" on an expanded network with Emirates is expected to make passengers more loyal to the airlines on competitive routes to Europe.
A day after Emirates moved to make its loyalty scheme similar to that of its new alliance partner, Qantas unveiled changes to its frequent-flyer program and baggage allowances before the launch on March 31 of its tie-up with the Middle Eastern airline.
It includes reciprocal access to airport lounges, recognition of tier status and a pick up at home in a luxury car for first and business class passengers on long-haul flights.
As part of the overhaul, Qantas's baggage policy will change from a so-called "piece and weight system" to a weight system similar to Emirates's, for international flights apart from those to the Americas.
While economy passengers who are not members will get an extra seven kilograms luggage allowance, the change will result in a reduction in the total checked baggage limits of between four and 68 kilograms for frequent flyers.
A feature of the alliance will be an expanded network from which members of both Qantas's frequent flyer and Emirates's Skywards schemes can earn status credits. But a Qantas frequent flyer will have to book through the airline's website or travel agent to gain status points on an Emirates code-share flight.
Jamie Pherous, chief executive of Corporate Travel Management, said Qantas and Emirates had "upped the ante on the loyalty programs".
Passengers can often earn loyalty points from flying on another airline but not status points, which are used to gain membership levels such as bronze, silver, gold or platinum. These give holders perks such as priority check-in or access to airport lounges.
"From a corporate point of view people love status credits. To get that on both airlines is pretty powerful," he said.
Mr Pherous said changes to Qantas's scheme would put pressure on Virgin Australia to improve its Velocity loyalty scheme, which was "still in build mode".
He expects the changes to Qantas's baggage allowances to be a mild irritant to some passengers but not a disadvantage to most frequent flyers.
Qantas has almost 9 million frequent-flyer members.
While Qantas members will be able to earn points on all flights as part of the joint Qantas-Emirates network, Skywards members will not be able to do the same on Qantas's stand-alone flights within Australia. The joint network covers routes from Australia to Europe, Asia, the Middle East and Africa.
Macquarie Equities said the condition on Skywards members would make Qantas frequent flyers less likely to switch their airline loyalty to the Emirates scheme.
The broker has estimated that Qantas could gain up to $40 million in pre-tax earnings a year from the sale of Qantas frequent-flyer points to Emirates, while a further $55 million could come from selling Emirates seats on behalf of the Middle Eastern airline.
The deal still needs final approval from the competition regulator.
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