I know that redemption rates have been going up in various programs, especially in the “rule-buster” category where there are no inventory restrictions on the availability. But it seems that Qantas has gone rather overboard introducing their new Qantas Any Seat Award program. The new program allows passengers to pay for the trip – including all taxes and fees – using points valued at one penny each. This valuation is hardly a new one. Delta announced a similar scheme back in March. Still, looking at the fares for a first class trip from the USA to Australia and seeing that the redemption will cost 1MM+ points (i.e. $10,000+) each way is more than a bit unsettling.
On the plus side, they do let you include all the taxes and fees in the mileage payment, so there is zero cash outlay. And in the days of $1000 fuel surcharges (only 100K points!!) that is a big accommodation, but it still is not a good thing for just about everyone.
I can book any available seat on a Continental flight between Newark and Asia for 300,000 points. That’s the equivalent of a $3,000 fare using the penny/point valuation. And buying a seat between Newark and Asia for $3K is pretty hard to do except in very limited sale instances. Even in those situations where you’re paying more points than the normal rate you’re still getting a pretty good deal.
But the Delta – and now Qantas – rates are basically telling you that there is no longer a way to get good value from the points you’ve accrued. The opportunity cost for acquiring the miles is often in the penny/point range, plus or minus a bit. If that’s the only redemption value that you can get then you are better off shifting your accrual efforts to a cash-back card or something similar. When I can convert 220K points into a $8K RTW ticket (or 50K points into a $1800 trip to Europe this summer, with free changes as I make changes to my plans no less!) I am getting great return on the ticket value. Qantas appears to be joining Delta in moving away from that benefit for their customers.
Are they killing the goose that lays the golden egg? Maybe. Time will tell. In the interim, I’d look at other places to stash those miles if you can.
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