This month, the Singapore Airlines frequent flyer program, KrisFlyer, made a play for Australian customers with its “Kris+ Miles” offering. It meansmembers in Sydney and Melbourne are now able to earn by tapping their rewards app in store at select merchants (very select merchants – there are only 34 Kris+ partners in the country). The move theoretically makes it easier to earn points – and, perhaps more interestingly, represents an airline vying to become a new carrier-of-choice.
Frequent flyer programs are a competitive space. Done right, they can snag consumers free flights and upgrades – a welcome perk, especially in the current economy.
But the real winners are, of course, the airlines themselves. These programs are highly profitable. Airlines can sell points in bulk to banks and retail partners (who, in turn, can use them to lure in new customers with things such as bonus points offers on credit cards). They are excellent marketing tools that encourage customer loyalty. And they’re a great way to harvest marketers’ most valuable resource: our data.
So what is the best frequent flyer program open to Australians now? How can you earn points without going anywhere? And given they’re likely tracking our every move, is being a member truly worth it? We asked some experts.
Which is the best frequent flyer program for Australians?
KrisFlyer may be trying to lure Australian flyers but experts say it’s best suited to those who regularly travel in and out of Singapore, or anyone keen to get a foot into Star Alliance, the global airline alliance it’s a member of – which Australians haven’t had easy access to since the days of Ansett. For the rest of us, it’s probably not about to become a major player.
“Realistically, the two real contenders come down to being a Qantas frequent flyer and [Virgin Australia’s program] Velocity,” Kidman says. “They’re the ones to give serious consideration to.”
That’s because Qantas and Virgin are the airlines you’ll be flying domestically, who have the vast majority of local credit card partnerships, and who allow you to earn points with your supermarket shop – which keeps your balance active when you’re on the ground (points can expire with as little as 18 months of account inactivity).
Locally, there is a new contender in regional carrier Rex Airlines, which this month announced its own frequent flyer program – though it’s still in its very early days and hasn’t yet announced any credit card partners, or revealed information on how to redeem flights.
So, for now, which out of Qantas and Velocity is the better program?
“I think Qantas because you just have more redemption options, because they find more places locally, and they have more partnerships globally,” says Kidman. “There’s a lot of variables to consider but, at a high level, that’s how I would sum it up.”
A key factor in Qantas’s favour is its membership in the OneWorld alliance. That means you can earn points – or access rewards flights – on airlines such as Cathay Pacific, Qatar and British Airways. Upper-level members of Qantas Frequent Flyer can reliably access perks such as lounge access across those partner airlines too.
Velocity, on the other hand, is not part of an airline alliance – but has one-on-one partnerships with airlines such as Etihad, United and Singapore Airlines.
“So what you find sometimes it’s a bit disjointed in terms of benefits,” says Daniel Sciberras, from the frequent flyer-focused website PointsHacks. He says some airline partners might give you lounge access but not priority boarding, while for others the benefits may be reversed.
While Virgin does have “a lot of good partnerships”, Sciberras says they don’t operate their own long-haul international flights, which means “they have no direct control, really, for any long-haul reward redemptions – they’re always relying on availability of partners”. And some airlines will give their own frequent flyer program members preference when it comes to handing out free seats.
In addition to that large range of international routes, Qantas also has a bigger domestic network than Virgin, which again means more opportunities to earn and redeem points. You may also rack up points faster flying Qantas because they allot points based on the distance you fly, while Virgin points are based on ticket prices.
“The trade-off for a lot of people is that the Qantas fares are higher in the first place,” says Kidman. “There’s no doubt that, on any given domestic route, if you’re looking at more than a week in advance you’ll find the Virgin flights a bit cheaper. So for some people, they favour Virgin because that’s the airline they want to fly with.”
Of course, if you live outside the major cities, your ability to fly Virgin at all may be very slight – meaning Velocity isn’t really an option. Ultimately, the decision may come down to which airline (and which partners) you’re most likely to fly.
You can also join multiple local programs – though it probably makes more sense to focus your efforts on one. “There’s nothing stopping you being in both of them and just seeing what you mount up,” Kidman says. “But the reality is, if you want to build the points total, you’re better off picking one scheme.”
How can you earn points if you’re not flying?
“Most of the points earned from the Qantas Frequent Flyer program aren’t from flying. They’re from what’s known as on-the-ground transactions,” says Sciberras.
Whether you’re with Qantas or Velocity, the fastest way to earn on the ground is through savvy credit card use. Kidman suggests “targeting [one scheme], getting a credit card that matches it, using your supermarket, and flying [your scheme of choice] when you can.”
But that advice comes with a big red asterisk.
“Never get a credit card for the points if you’re not going to pay it off in full,” says Sciberras. This is because point-accruing credit cards charge high interest rates, and the cost of paying those far outweighs any points-related benefit.
If you’re confident in your ability to pay off your card in full each month, credit cards that accrue Qantas or Velocity points with every dollar spent will fast-track your accumulation.
Sciberras says to look for cards that offer a sign-up bonus of six figures – 100,000 points or above. Next, consider how many points you earn per dollar spent. You may also want to look at spending caps, as many cards will only offer the best earning rates up to a monthly limit. And it’s worth considering that American Express cards, which often offer better sign-up bonuses and earn rates, aren’t as widely accepted as Visa or Mastercard.
But point-accumulation needs to be weighed against the cost of owning a credit card – bigger sign-up bonuses tend to come on cards with higher annual fees. You should also consider whether you can realistically achieve the minimum spend required to earn bonus points, which is typically between $3,000 and $6,000 in the first three months. (And when it comes to Qantas versus Velocity, it’s also worth noting that Velocity cards often – but not always – have lower annual fees and easier-to-achieve sign-up bonuses).
The other big way to earn points on the ground is your grocery shop – you can earn Qantas points shopping at Woolworths (via their Everyday Rewards card) and Velocity points at the register at Coles (through FlyBuys). There’s a not-insignificant number of points on offer at the till – Kidman says he’s managed to earn over 42,000 Qantas points doing his groceries this year.
You can also earn points by buying a certain car, health or travel insurance policies, or shopping at particular outlets – 7-Eleven, for instance, offers customers Velocity points every time they spend. And if you download its Wellbeing app, Qantas will give customers a (very small) number of points for things such as getting enough steps and sleep every day.
Are they all just harvesting your data?
The big caveat to all frequent flyer programs is that there’s no such thing as a free lunch – memberships come at the cost of sharing personal data.
Katharine Kemp, an associate professor at UNSW who researches data privacy, says that while some consumers might think of frequent flyer programs as a reward for loyalty, “in fact most of these schemes really are data businesses that are collecting a vast array of information and using that to provide ‘insights’ to other firms”.
It’s not just travel bookings, spending habits and grocery orders that frequent flyer schemes get access to.
“In addition to that, a lot of these schemes actually go behind consumers’ backs, and approach third parties to find out further information about them,” Kemp says.
As well as being used to simply sell you more stuff, that “wide range of information about you” can be used to determine the content you see online, exclude you from certain offers, force you to pay more for certain products, or indicate that you are “too great a risk in the eyes of some companies for certain services,” Kemp says.
Unfortunately, that behind-your-back data sharing means being selective with where we link our points (for instance, collecting them only through our flying and not our groceries) might not help.
Given these programs don’t tell consumers exactly how data is being used and retained, it is impossible to know whether one program is more data-safe than another. Nor can Australians simply opt out of data collection.
“If you are an EU or Swiss resident, you can object to being profiled by a frequent flyer scheme. But if you’re an Australian consumer, you don’t have any right to object,” Kemp says. “Our privacy laws are not as strong.”
Whether or not you’re happy to join a frequent flyer program anyway is a personal choice.
“I don’t like to tell people what to do,” Kemp says. “But I am not part of any of these programs myself. Because in my view, for myself, I don’t think the risk is worth it.”
