5 Reasons Not to Transfer ThankYou Rewards to Qantas

Feb 26, 2015

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

The travel rewards landscape is constantly changing, sometimes for the worse, sometimes for the better, and sometimes for nothing. Today, TPG Contributor Richard Kerr explains why you can forget about Citi’s newest transfer partner.

It’s always good news when a flexible rewards program adds another transfer parter, as the more opportunity you have to use your points, the better. This week, Citi added Qantas as the latest ThankYou Rewards transfer partner. Known around the world for its fatality free safety record in the jet era, and as the national carrier of all things Aussie, you may have been excited when you read the Qantas news. Unfortunately, there’s not much to be excited about.

In today’s post, I’ll give a brief intro into the Qantas Frequent Flyer program, and show you why you shouldn’t expect to get much out of transferring your ThankYou Rewards to the airline down under.

It’s nice have options, but as far as transfer partners go, Qantas doesn’t have much to offer.

Overview of Qantas Frequent Flyer 

The Qantas Frequent Flyer program has a few nuances. On the earning side, you receive a flat number of Qantas Points based on the fare class of your purchased ticket and the route you’re flying. For example, a discount economy fare from Australia to the West Coast of the USA will earn 4,500 Qantas Points; non-flexible premium economy will earn 11,250 points, and non-flexible business class will earn 13,500 points. Domestic Australian flights are guaranteed to earn a minimum of 800 Qantas Points.

When it comes to redeeming points, Qantas operates on a distance-based award chart for Classic Reward Flights. As a member of Oneworld, Qantas allows you to redeem your points for flights on any Oneworld airline (though there are costs involved — we’ll get to that in a minute). However, like United, Qantas charges you slightly more to redeem with partners than to redeem for a Qantas flight. You can also use Qantas Points for Points Plus Pay, which allows you to redeem a certain number of Qantas Points to lower the fare, and pay the remainder out of your pocket. The final redemption options are Classic Upgrade Rewards, a plethora of merchandise via the Qantas Store, and some obscure rewards like joining a fine wine society, gift cards, or travel insurance.

Screen Shot 2015-02-25 at 7.38.16 PM
The distance-based Qantas award chart fails to offer any real value.

Now that we have the basics of the program, the following examples will illustrate just how uninspiring the Qantas Frequent Flyer program is, and what poor value it offers. Here are 5 reasons not to transfer your ThankYou Rewards:

1. You want how many points?!
It’s ugly, folks. Brisbane to Los Angeles round-trip in economy is 96,000 points. United will charge you 80,000 for the same route, and American just 75,000. Qantas will charge you 196,000 to fly that route in business, while United wants 140,000, and American just 125,000.  Ready for the T-Rex sized number? Qantas offers first class on its Sydney to Dallas route aboard the A380, all for the not-so-pretty price of 336,000 points round-trip.

2. You still pay for fuel
Qantas seems to be a big fan of the common economic idiom ‘There’s no such thing as a free lunch.‘ The airline sure does take that to heart when it comes to redeeming your points for “free” flights. Despite the recent announcement that Qantas would lower fuel surcharges on Classic Flight Rewards, the costs are still outlandish. A round-trip economy ticket between Australia and the USA will still cost you $570 in fuel surcharges on top of other fees. Business class on the same route costs $670. Don’t forget, these cash charges are in addition to the astronomical redemption amounts listed above.

3. Opportunity Cost
If you’re transferring ThankYou Rewards to Qantas, that means you’re missing out on opportunities to transfer to more lucrative partners like Singapore Krisflyer and KLM/Air France Flying Blue. I flew Singapore Airlines’ A380 Suites from Singapore to Tokyo last month for a minimal 51,000 KrisFlyer miles.

Sydney is a fantastic place to visit, but don't use Qantas Points to get there. Courtesy Shutterstock.
Sydney is a fantastic place to visit, but don’t use Qantas Points to get there. Photo courtesy of Shutterstock.

4. Unattractive Partner Rates
With Qantas charging a higher number of miles for redemptions on Oneworld and other partner airlines than its own flights, the options are even worse than what I explained above. As a distance-based program with much less favorable redemption levels than British Airways distance-based awards, there are no ‘sweet spots’ in the award chart where it’s better to use Qantas points to book a partner airline over another program like AAdvantage. Compare a first class flight on the American A321 Transcon from JFK to LAX. American would charge you 32,500 miles for a First SAAver seat, while Qantas wants 78,000. Ouch.

5. Poor value across the board
Not only do Classic Flight Rewards and Oneworld Flight Rewards offer poor value, but the other Qantas redemption options are even worse. The Qantas Store offers a value of 0.5 cents per mile to a high of 1.17 cents per mile if you can catch one of their special offers (HT FlightFox).  Points Plus Pay seems to offer a flat value of 0.67 cents per mile to lower the fare amount you would pay out of pocket.

Some upgrade options could be attractive, but you have to buy more expensive fares in the first place in order to qualify for the lower number of points to upgrade. A search for Los Angeles to Sydney round-trip showed a premium of $800-$1000 for a flexible economy fare, which would qualify you for the lower number of points needed to upgrade. Reports are that you pretty much must have Qantas status to have a shot at clearing an upgrade anyway. Are you willing to pay that much for just a chance at upgrading? I’m not.

Utilizing Points + Pay, a one way Sydney to Los Angeles economy flight would cost 112,000 points.
Utilizing Points + Pay, a one way Sydney to Los Angeles economy flight would cost 112,000 points.

It’s great that Citi is making an effort to add new airline transfer partners, but Qantas doesn’t offer ThankYou Rewards members any real value. I suppose if you were stuck in Australia, strapped for cash, with your wallet stolen, and unable to wait for Citi to send you a new credit card, having the ability to transfer ThankYou Rewards to Qantas to get home or get back to Sydney could be a good thing. Also, if you’re hell bent on flying the safest airline in the world, Qantas should be your next transpacific flight. Otherwise, you can find a better use for your ThankYou points.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.