Home' Australian Aviation Magazine : May 2011 Contents 25
MAY 2011 AUSTRALIAN AVIATION
And when Tesna tried to relaunch
Ansett in early 2002, the bid collapsed
shortly after the backers revealed that
Ansett Global Rewards frequent yer
program members would lose their points
under Tesna's customer loyalty program.
While Tesna o ered a better rewards
program, the deal never gained traction
as former Ansett frequent yer program
members felt that they were secured credi-
tors. In fact disgruntled former frequent
yer program members, represented by the
Global Rewards Action Group and Diners
Club, vowed to pursue Ansett administra-
tors, seeking a bigger share of Ansett 's
assets for their lost points.
e tussle over whether the points are
a right or reward has simmered for years.
In 2000 the ACCC investigated frequent
yer programs, with then chairman Allan
Fels saying that the consumer watchdog
had "received an increased stream of
complaints regarding the frequent yer
programs being o ered by the major
Fels added: "As a result of these com-
plaints it is seeking to assess whether
frequent yer programs raise any issues
under sections 52 and 53(c) of the Trade
Practices Act 1974. Section 52 prohibits
misleading and deceptive conduct and
section 53(c) prohibits representations
concerning performance characteristics,
uses or bene ts that ser vices do not have.
"In particular, the ACCC is seeking to
assess whether there is adequate disclosure
of the terms and conditions relating to
frequent yer programs.
" e most common complaint is that
having built up points under a frequent
yer scheme it is actually di cult to re-
ceive the bene ts because of seat unavail-
e ACCCs major concern was that
the "promotion of frequent yer programs
focused on the trips, gifts or special deals a
member can obtain, with little mention of
the restrictions imposed by the terms and
conditions of these schemes."
During the investigation, Qantas an-
nounced a raft of changes to make its
program clearer to the ying public and
those changes ironically took e ect on
September 15 2001 -- the day after Ansett
ose changes included the lifting
of expiry deadlines, new international
upgrade redemptions, and a guaranteed
minimum 1000 point earn rate for any
Fels commented at the time that the
changes streamlined the structure of the
Qantas Frequent Flyer program, but
he warned that the program continued
to carry restrictions on the accrual and
redemption of points.
"It is important that advertised rewards
are available, and that the restrictions im-
posed on the redemption of those rewards
are made clear to consumers. Qantas has
taken positive steps to improve such dis-
closure," Fels said.
But those changes proved inadequate
and the ACCC again investigated the
Qantas program, along with others, in
2004. As a result Qantas made further
changes and increased access to award
ights, and provided more transparency
and certainty of travel for frequent yers.
However, ACCC chairman Graeme
Samuel (who had by then succeeded Fels),
noted that despite consumer complaints
there was insu cient evidence to establish
a breach of the Trade Practices Act 1974.
Samuels praised Qantas for "introducing
an online search function, allowing mem-
bers to more readily determine preferred
award seat availability."
"Complaints received by the ACCC
have been from consumers unable to
redeem their points for award ights to a
destination of their choice on dates and at
times of their reasonable choosing, who
may not have been aware that availability
of award seating is limited," Samuels said
at the time.
" e ACCC does not comment upon
the value of loyalty programs, or the re-
wards o ered under these schemes. How-
ever, the ACCC is concerned to ensure
loyalty schemes are operated transparently
so consumers are not misled as to the
bene ts to which they are entitled and any
limitations on those bene ts," he added.
e Qantas and Virgin frequent yer
programs of 2011 bear little resemblance
to those of just ve years ago, and have
developed into major revenue streams.
Simon Hickey, chief executive o cer of
the Qantas Frequent Flyer program, says
one of the great strengths of the airline's
program is its wide variety of 'earn-and-
ere are now over 490 partners in the
program, including 250 restaurants, where
points can be earned, while members
can burn points by 'classic', 'any seat' and
'points plus pay' redemptions of ights,
ight upgrades, and buying goods -- from
electric toothbrushes to iPods and watches
and jewellry -- through the online frequent
Hickey tells Australian Aviation that
"nearly 20 per cent of redemptions are
the new points plus pay option, while the
online store is proving very popular with
10 per cent of redemptions."
In 2008 Qantas added the 'any seat'
reward and restructured the credit card
reward structure for direct earn in 2009.
en in 2009, Woolworths became a part-
ner, and more recently Caltex Fuel came
onboard. Over three million members are
now earning points at Woolies, as well as
Big W, BWS, Dick Smith and Tandy.
FIRST MOVER American Airlines' AAdvantage program is credited with being the first effective frequent flyer
scheme. (Rob Finlayson)
"It is important that advertised rewards are
available, and that the restrictions imposed on
the redemption of those rewards are made clear
to consumers. "
Links Archive April 2011 June 2011 Navigation Previous Page Next Page