The accrual of personal airline status credits by public servants, politicians and their staff travelling for work may influence which carrier they fly with despite rules that insist on the cheapest fare, an expert in aviation loyalty programs says.
Adele Eliseo, publisher of The Champagne Mile frequent-flyer website, says many regular travellers value status credits – which are earned on paid flights and calculated on travel distance and fare level – over points that can be traded for flights and seat upgrades.
Eliseo said on Monday that the credits which accumulate over a year and elevate travellers through status tiers are highly prized.
“We know that people really do covet the kinds of perks and benefits that they can obtain through status credits,” Eliseo said. “So we’re talking things like upgrades … also lounge access, and extra baggage even – things like that. Certainly in our experience with our readers, people tend to actually value the status perks more than Qantas points. That’s what I think is driving the demand for Qantas bookings, even when they may be more expensive than the competition.”
Top-tier travellers can also access priority booking and boarding.
Ever since an overhaul of the rules in 2010, government travellers have been banned from accepting frequent flyer points for work-related travel. But the ban did not extend to status credits, which continue to be awarded to individual flyers.
Although the status credits expire annually, airlines keep accrual records and reward long-term loyalty with senior-tier lifetime status once certain milestones are reached. This removes the requirement to maintain the travel rates usually required for retention and making the benefits permanent.
Announcing a recent status-credits promotion, Qantas emphasised the popularity of status credits, noting that in a previous promotion “participating members booked nearly 200,000 flights, with 60% choosing to fast-track their status and 40% choosing to boost their points balance”.
Government travel rules say employees should accept the lowest available fare in accordance with the travel determination, including considering alternative airlines or discounted fares, “unless this would adversely impact on the purpose of the travel”.
“Value for money is the overarching consideration when selecting air travel,” the rules say. “Accordingly, entities must select air travel based on an impartial consideration of the available fares, not a personal preference for a particular airline or aircraft type.”
Fully flexible fares cost more than the discounted version and also attract more status credits.
In its submission to government during consultations on the aviation white paper last year, Virgin Australia said 90% of annual official travel for federal parliamentarians and their staff was with Qantas. It said Virgin secured only 23% of public service airline travel – a market estimated to be worth $250m a year.
In the submission, Virgin Australia suggested Qantas’ dominance of government travel was linked to public-sector travellers being able to accrue status credits.
“Virgin Australia would support a ruling that, in addition to the current prohibition on earning frequent flyer points, prevents the accrual of status credits on Government-funded travel,” the Virgin submission said.
Eliseo said Qantas’ overwhelming dominance in the government market may come down to people enjoying “a couple of plates of salt and pepper squid in the Qantas First lounge”.
Qantas is understood to attribute its government travel dominance to a more extensive network than its competitors and especially more frequent flights in and out of Canberra.
A Finance Department review of travel rules is now under way. Guardian Australia has sought comment from the department.
Independent senator for the ACT, David Pocock, favours changing travel rules to align more with community expectations. “If claiming status credits is impacting competition and value for taxpayer money then I think there is a case for reform,” he said.
Other parliamentarians are also calling for reform.
“I think Qantas and Virgin should make a commitment not to give any free upgrades,” independent MP for Wentworth, Allegra Spender, said on Monday.
The Greens leader, Adam Bandt, said if there was “a case for the rules to be changed then they should be changed”.
On Monday, the secretary of the transport department, Jim Betts, defended his and other top bureaucrats’ membership of Qantas’ exclusive Chairman’s Lounge – that includes access for their partners – insisting he and his colleagues do not make regulatory decisions affecting airlines.
Betts’ comments came amid ongoing debate about the influence of Qantas on federal decision-making and recent scrutiny about flight upgrades Anthony Albanese received when he was transport minister. Albanese has said he declared all upgraded travel as required.
Betts told a Senate estimates hearing that while he has Chairman’s Lounge membership with Qantas, he only has access to Virgin Australia’s standard lounges, not its exclusive Beyond Lounge.
He said he did not believe membership of the elite lounges created a perception of influence over the department.
• This article was amended on 5 November 2024 to correct the spelling of Adele Eliseo’s surname.
