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 THE FREQUENT FLYER GAZETTE   ::   MARCH 2004
 ISSN 1446-4292
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CONTENTS ::
 
1. Credit Card Cuts
2. Program News
3. Industry News
4. Promotions


Editors Note ::
 
Hello and welcome to the March edition of the Frequent Flyer Gazette.

Lots of news to report this month.  The CBA and Westpac have reduced the frequent flyer benefits for their most popular credit cards - read all about it and what we recommend and most importantly what we don't recommend!

We also feature the Bank frequent flyer programs and discuss the launch of Jetstar and those illusive $29 fares.  Plus there's all the usual news and promotional offers.

Finally, a big thank you to all those who completed last month's survey.  As always, the response was fantastic and we continue to value your input.

Happy reading.

Ben
Editor, Frequent Flyer Gazette

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Last minute hotel reservation!


 
1. COMMONWEALTH BANK AND WESTPAC REDUCE FREQUENT FLYER BENEFITS
 

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Late last month the CBA and Westpac reduced the frequent flyer redemption rate for their most popular credit cards.  What this means is that you will be getting fewer frequent flyer points for each dollar you spend with these cards.

From 9 March 2004, the redemption rate for converting Westpac Altitude points into airline frequent flyer points will reduce from one to 0.5 frequent flyer point for every one Altitude reward point earned.  And from 1 July 2004, 2 Commonwealth Awards points will be required for each Qantas Frequent Flyer point. Commonwealth Awards members will also have their points capped at 50,000 annually.

Keep in mind that these changes only apply if you convert the points to Qantas (or another airline's) frequent flyer points.  If you keep them in the Altitude or Commonwealth Awards program, you still get full value.

The reason for these cutbacks is clear:  the Reserve Bank of Australia�s recent credit card reforms has significantly reduced the income generated to the banks by Visa and Mastercard transactions.  This means there is less cash to fund the purchase frequent flyer points from the airlines.  The banks are therefore encouraging customers to use co-branded charge cards (such as American Express and Diners) which are not subject to the Reserve Bank's credit card reforms and therefore (generally) offer one frequent flyer point per dollar spent.

Our recommendation
Give your bank the flick and change to a bank with a more generous offering?  Tempting as it might be, this is probably the wrong solution.  It's worth noting that our other 2 major banks recently introduced similar changes:  in October last year ANZ capped the number of frequent flyer points on their most popular credit card, and NAB introducing similar restrictions the previous year.  Changing banks won't solve the problem - there is no guarantee that your "new best friend" won't change the rules under you after winning your business.

Instead we recommend you take up any introductory offer your bank is promoting and then re-assess the situation at some time in the future but before that offer expires.  For example, Westpac is offering Altitude Visa/Master card holders a companion Altitude Amex card which earns 2 Altitude points (ie. 1 frequent flyer point) per dollar spent.  The $45 fee is waived for the 1st year (conditions apply, as always!).  Take up the offer, get the extra points, and then see what's available in 12 months time.  Who knows what amazing deal will be available then!

In October 2003, we published A Guide to selecting �Frequent Flyer� credit cards.  The Guide is a bit dated now as it doesn't include the recent CBA and Westpac changes, but does include a generic framework  for selecting cards based on individual circumstances.  We are planning on producing a new Guide in the coming months, which will be offered to existing customers at a discount.


2. PROGRAM NEWS
 

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Reward schemes you can bank on

As mentioned in the previous section, our Banks are continually cutting back on frequent flyer point redemption rates.  Maybe now is the time to consider 'purchasing' travel directly with your Bank's own Reward program, rather than converting your Bank Reward points to frequent flyer points and then going through the frequent flyer system.

Clifford Reichlin from frequentflyer.com.au recently published an article in The Australian newspaper which explains the benefits of this approach.  You can view a copy of this article HERE.

Qantas Frequent Flyers and JetStar - not going all the way

Some good news and some bad news - Qantas Frequent Flyer members will be able to redeem Qantas Frequent Flyer points with Jetstar, the airline's new low cost carrier. However, Qantas Frequent Flyer members will not be able to earn points or status credits for travel on Jetstar.

Qantas Club members will be welcome in Club lounges when flying on Jetstar

Virgin Blue rumours continue

Rumours about the imminent introduction of Virgin Blue's Frequent Flyer scheme continue.  The story we hear is that it's going to be a simple "buy 10, get 1 free" type program with very few restrictions.  We even heard that printed material will be available in late Feb, early March.

Will its now early March and still no official announcement.  So, maybe its just a rumour after all!

Jobs for Frequent Flyers

Ever wondered what those well travelled business people do which allows them to lead such "exciting" lives - jetting off to exotic overseas destinations, staying at the best hotels etc.  (Although if you get to speak to them, you will find it's not exciting at all, and they'd rather be at home with their family.)

Check out this discussion on our Discussion Board to find out how you can also become a true frequent flyer!

Changes to Qantas Club guest policy

Effective 1 June 2004, most Qantas Club members will be permitted one guest per visit to the Qantas Club.  If you want to invite additional guests you will need to fork out $200 for an annual guest pass.

 

Access over 400 airport lounges worldwide with Priority Pass...  Advertisement


 

 

Priority Pass provides airport lounge access irrespective of who you are flying with, what class you are travelling in, or whether you belong to an airline lounge program. And as a member you'll enjoy the following privileges at airport lounges around the world:

  • Peace and quiet - the chance to relax before your flight
     
  • Refreshments and snacks - no need to queue for expensive airport food
     
  • Full use of facilities - most lounges offer phones, fax machines, email, Internet access and even conference rooms.

Priority Pass is the easy, affordable way to escape the chaos of busy airport terminals, flight delays and cancellations and to enjoy the peace and privacy of a VIP lounge.

To discover more about Priority Pass CLICK HERE

 


3. INDUSTRY NEWS
 
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Jetstar and those $29 fares

As you are all probably aware Jetstar, Qantas new low-cost carrier, are now taking bookings and their 1st flight is scheduled for 25 May. 

Chief executive Alan Joyce said the airline's website received more than 5.5 million hits since it went live at 2pm on Wednesday February 25. "More than 94 per cent of the seats have been sold via the jetstar.com.au website," Joyce said. "We've had an unbelievable response to our special 100,000 $29.00 fare offer and our Jetstar Jet Saver fares.�

Never missing an opportunity for a bit of cheap publicity, Virgin Blue immediately "raised Qantas to 200,000" by offering 200,000 $29 fares.  May the price war continue...

Jetstar plan to capture one third of the Australian domestic market.

The Flying Kangaroo is not Red

Inspite of falling revenue (when compared to the corresponding period the previous year), Qantas has reported a net profit of $357.8 million for the six months to 31 December 2003. CEO Geoff Dixon said strong domestic demand - fuelled by the rationalised fare structure - as well as a swift bounce-back in international travel following SARS, had driven the result. Other primary drivers are improved efficiency from cost-reduction initiatives and the introduction of new aircraft.

And the good news flows on to travel.com.au.  The online travel agent reported a $9,000 profit (well, at least its not a loss) profit for the six months to December 31 last year.  This is its 1st reported profit since its public listing in 1999 and compares with a loss of $5.84 million in the corresponding half-year in 2002.

Brisbane to LA direct

Qantas plans to operate the first ever non-stop scheduled services between Brisbane and Los Angeles from June 14. CEO Geoff Dixon said the airline would introduce three B747-400 non-stop Brisbane-Los Angeles flights a week. The two-class services would operate on Wednesdays, Fridays and Sundays.

The new services will be in addition to Qantas daily flights from Brisbane to Los Angeles via Auckland, taking the number of services on the route to 10 per week.

Pacific Blue continues to expand internationally

Pacific Blue, Virgin Blue's international carrier, plans to fly to Fiji and Vanuatu from September this year. The proposed service is still subject to regulatory approvals.

Pacific Blue commenced operations in January this year with a trans-Tasman service.

Better service in Western Australia

Qantas will boost capacity to six Western Australia destinations, adding 700 seats each week from February 23 and a further 1,000 seats from March 28 by using larger aircraft.

The carrier's executive general manager, John Borghetti, said this latest increase in capacity followed a series of other Qantas initiatives in Western Australia, including weekly Perth-Kununurra services from May 1 and non-stop services from Perth to Canberra and Cairns which began earlier this month. "From next month, we plan to add 800 seats each week on our routes between Broome and Alice Springs, Sydney and Melbourne," he added.

   


4. PROMOTIONS
 
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Qantas Award discounts

25% off Award flights between Sydney and Alice Springs.  Valid for bookings 1 to 15 March 2004, for travel 1 to 31 May 2004.
 

Air NZ USA Holiday deals

5 nights in Disneyland including airfare from Sydney from $1,835.  Valid for bookings by 8 March 2004, for travel 1 May to 17 June 2004.

2,000 bonus KrisFlyer miles

Take-Off with Singapore Airlines this New Year with fantastic new fares to destinations around the globe, including Europe, Asia, India and Africa. Book and pay for your New Year Take-Off fare online and receive 2,000 bonus KrisFlyer miles.

United Airlines: Book online and receive bonus miles

Purchase online from the united website and fly a United round-trip between Australia and the US and you�ll receive 1,000 bonus miles for first-time booking and 1,000 bonus miles for subsequent tickets you book online until June 30, 2004.

 

� THE AUSTRALIAN FREQUENT FLYER, 2004