Frequent flier schemes: What's the point?

Oct 25, 2011, 3:06 GMT

Sydney - It takes about 90 minutes to fly between Sydney and Melbourne - about the same time for some of those aboard to work out whether the frequent flier rewards were worth it or if simply going with the cheapest carrier would have been best.

The schemes have become so complicated - bronze, silver and gold memberships as well as options to pool points and even to suspend participation during down-time caused by a pregnancy - that Australian consumer group Choice is recommending a re-think.

'These points have become a virtual currency for airlines,' Choice spokeswoman Ingrid Just said in a statement. 'You're better off finding the best flight deal and saving your money to spend elsewhere.'

She worked out that on Virgin Australia's entry-level frequent flier programme you would have to jet between Sydney and Los Angeles 13 times to score a free trip. Would it not be easier to go with the lowest-priced carrier on those 13 trips and let any money saved earn interest in a bank account?

Choice research also let fly at carriers encouraging passengers to swap points for products. The non-profit outfit found that it would take four Virgin Australia Sydney-Los Angeles round trips to earn a microwave oven worth around 125 Australian dollars (123 US dollars).

'Unless you're clocking up serious air miles or paying for more expensive seats when you do fly, you're going to wait a long time before you earn enough points for a toaster, an upgrade or a ticket,' Just said.

That said, many business travellers are locked in to a carrier by their employer and, anyway, there is no incentive for them to shop around because the company pays for the ticket.

There is an obvious problem with any jam-tomorrow scheme. What happens if the airline folds?

Ansett Airlines did just that in 2001 and no other airline would honour the frequent flier points that loyal passengers had earned. Keith Fay, a Sydney haematologist, remembers it well. He had saved enough points for a round-the-world trip with his wife and lost the lot.