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In case you haven’t already heard, Qantas released its latest Double Status Credits promotion this week. Until tomorrow, you can earn double Qantas status credits on all new Qantas flight bookings, for travel until the end of August.
Double status credit promotions are popular with both airlines and their customers, and for good reason. These offers encourage forward airline bookings, providing a short-term revenue hit for the airline. And frequent flyers benefit from the ability to earn status with half the usual amount of flying. It’s a win-win… or is it?
Virgin Australia also ran a double Velocity status credits offer at the start of this month. And last year, Qantas ran three double status credit promotions – with the last two offers running in relatively quick succession.
Playing devil’s advocate for a moment, it’s not hard to see several downsides to the increasingly-frequent double status credit promotions that the airlines just love.
Promotions do not foster long-term loyalty
Promotions such as double status credit offers are generally directed by an airline’s Finance department, not Loyalty. As a result, they’re not designed to foster loyalty to the airline – at least, not in the long-term. The main purpose of these promotions, from an airline’s perspective, is to meet short-term revenue targets.
Frequent flyers have become just as addicted to these promotions as the airlines. This is evidenced by the 200+ posts in a recent AFF thread where members tried to predict when the next Qantas double status credits offer would be.
Here’s the thing. If somebody is relying on frequent double status credit promotions to maintain their status every year, they’ll probably just switch to another airline if the offers stop coming. What’s more, if people come to expect such frequent promotions, they may be less likely to book with Qantas when there’s no extra incentive being offered.
On one hand, that’s a good reason for the airlines to keep running these promotions. But continuously awarding status to people that haven’t really earned it as intended is a poor long-term strategy.
If everyone has status, nobody has status
As Delta Air Lines famously said, “if everyone has status, nobody has status”. This line was used to justify making it harder for frequent flyers to achieve elite status with the airline, but they do have a point. Status benefits like priority check-in, priority boarding and a higher spot in the upgrade queue only work because most people don’t have the same benefits. If everyone on a flight is eligible for priority boarding, then nobody actually has priority. (That said, Qantas has never been great at priority boarding anyway.) Not to mention, both Qantas’ and Virgin’s airport lounges can get very crowded during peak periods.
Promotions that make it easier for people to earn status have the potential to devalue status for those genuinely loyal frequent flyers that earned status the hard way. And if too many people have status, airlines may eventually erode some of the benefits or make it harder for everyone to earn in the long term.
This doesn’t just apply to Double Status Credit promotions; both Qantas and Virgin also now make it possible to earn status credits via credit card spend. And Virgin Australia has been regularly sending out Explore Gold offers to Flybuys members for several years.
Airfares are typically higher during Double Status Credit promos
Ultimately, these promotions work a treat. So, it’s unlikely they’ll stop any time soon. In just five days, airlines can generate lots of revenue – and it’s good revenue. By restricting the offer to flights marketed and operated by that airline, the airline gets to keep all the revenue for itself. (This is not the case if the customer books a codeshare flight on another airline.)
The airfares being sold during the promotional period also, on average, have higher yields (profit margins) as many of the sale fares are unavailable while double status credits are on offer. This is, of course, not so good for the average flyer that just wants the best price.
With all that said, these offers are great if you want to boost your Qantas or Virgin status in the short term. So, if you’re able to make these offers work for you, then by all means book away!
Join the discussion on Qantas’ latest double status credit offer on the Australian Frequent Flyer forum: QF Double Status Credits – Book by Feb 22, Travel Feb 25-Aug 31, 2019
