What you should do with frequent flyer points
FREQUENT flyer points have lost lustre amid grounded flights and airline collapses, but there is still value and opportunity for savvy program members.
Virgin Australia’s plunge into voluntary administration last month has seen its
Velocity frequent flyer program put on hold, while Qantas points can still be earned and spent – even though almost no planes are flying.
Frequent flyer points specialists say patient customers should still benefit, and warn against cashing out points for gift cards, appliances and other items if they plan to fly in the future.
The founder and CEO of iflyflat, Steve Hui, said he believed Virgin and Velocity would be up and running again domestically within six months.
Mr Hui said members might receive “a slight haircut in terms of value of points but they won’t want to do that right away”.
“They don’t want people to think these programs are useless now,” he said.
Mr Hui said Qantas members could use points to book flights up until April 2021.
“Just because nobody is flying right now doesn’t mean no one can fly in December,” he said.
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“You get better bang for your buck to fly.”
A reward point used to buy a gift voucher or other online store item was worth half a cent, Mr Hui said, but for an economy
Anthony Keane flight it was 1.1c and for business class 3.5c.
“But if you have lost your job, cashing your points out for a gift voucher is better than nothing,” he said.
Thechampagnemile.com.au founder Adele Eliseo said Velocity members had no option but to sit tight after the program suspended redemptions.
“The Velocity program boasts over 10 million members and is highly profitable in its own right, so it’s very unlikely that the program will disappear,” she said.
Ms Eliseo said there would likely be a restructuring of the program, which had eroded
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Sophie Elsworth customer loyalty and trust. “However, with Virgin Australia experiencing a severe cash crunch, it simply wasn’t sustainable for Velocity to continue to allow a run on points,” she said.
Ms Eliseo suggested Qantas members hang on to their points and “avoid the temptation to cash them out for low value at the Qantas Store”.
“While overseas travel may be off the cards for now, domestic and possibly even trans-tasman travel may open up in the short- to mediumterm,” she said.
A Qantas spokeswoman said two-thirds of Qantas points were earned through credit cards and other partnerships, and many members stockpiled their points to take big trips.
“We haven’t seen travel restrictions change that behaviour,” she said.
“In fact, more than 80 per cent of members still want to use their points on a holiday – they’re just delaying it.
“As we come out of the isolation period, we’ll be looking at ways to increase the number of redemption seats across Qantas and our partners to help people use the points they’ve been saving up, and meet the significant pent-up travel demand.”
sophie.elsworth@news.com.au
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“Australians are pretty apathetic – we have this idea that it’s never going to happen to us,” she said.
Planning for Prosperity senior financial adviser Daniel Budreika said life before COVID-19 had made some people “soft” because money and luxuries were more abundant.
“When the money’s flowing you could afford to be inefficient, whether you’re a person, a business or a government,” he said.
Mr Budreika said the coronavirus had made people look inward and want to review their personal situation.
“They have got more time on their hands, and money for some people is a lot tighter,” he said.
This led to people taking a greater interest in their household finances, Mr Budreika said.
For businesses to be eligible their turnover needs to have fallen by 30 per cent.
The Government will provide a $1500 fortnightly payment per eligible employee until September 27.
The initial enrolment period has been extended from April 30 to May 31.
Eligible workers must have been permanent full-time or part-time at March 1. Longterm casuals need to have been employed for at least 12 months.
For more information visit business.gov.au