0:05

Welcome to the Fear and Greed Business Interview. I'm

0:07

Sean Aylmer. Today's interview is shamelessly

0:10

voyeuristic. It's all about travel and

0:12

all about frequent flyer points. Recently,

0:15

Qantas announced a major overhaul of

0:17

its frequent flyer program, which is an absolute

0:19

behemoth of a loyalty platform. There

0:21

are almost 16 million members

0:23

in Australia, so it can sometimes be a bit

0:26

hard to secure a Classic Reward seat

0:28

on a Qantas flight using your points.

0:30

It's one of the reasons why Qantas is introducing

0:33

the Classic Plus program, which

0:35

according to the airline, will add about 20 million reward

0:37

seats. These can be used on international

0:40

flights from July and domestic later in the year.

0:42

It seems like a good excuse to talk about points. Not

0:44

just the new system, but how to get the most out of your

0:46

points, and get business class travel

0:48

for less. Steve Huy is the founder

0:51

of iFLYflat, often

0:53

referred to as the Points

0:55

Whisperer for his work helping

0:58

businesses maximize the value of

1:00

their points. Steve, welcome to

1:02

Fear and Greed.

1:03

Thank you for having me.

1:05

First, let's look at the new Qantas

1:07

Classic Plus scheme.

1:10

It sits alongside the Classic Rewards

1:12

and the Points Plus Pay.

1:15

There are now three ways to book, I think.

1:18

How do they work? How do they differ?

1:20

Yeah, that's right. The Points

1:22

Plus Pay has been around for a while,

1:25

and that in a way is the lowest value

1:27

use of points. That's when you're converting

1:29

your points into a fixed value

1:31

of . 666 cents,

1:34

and then you're using that towards the price

1:37

of a ticket. Effectively, it's

1:39

like a flight credit and you

1:41

can use those points to pay in any

1:43

combination, whether you've got enough

1:45

points or you don't enough points. It's

1:47

like a discount off your ticket. Then,

1:51

what we had was Classic

1:53

Reward flights, and that's the

1:55

highest value use of points. That's

1:58

when you're converting your points and use

2:00

them as actual frequent flyer points.

2:03

The magic of that use, of tapping into

2:06

a program where it's a fixed number

2:08

of points to fly to the same destination.

2:11

Whether you are going to say, Europe during

2:13

Christmas, school holidays, peak

2:16

or off- peak, it's always the

2:18

same number of points. That's awesome

2:20

because you can fly for the

2:22

same number of points wherever you want to go tonight

2:25

or a year away. Then,

2:27

Qantas, because there's not been

2:29

that many Classic Rewards seats

2:32

available, or because

2:34

so many people, like those

2:36

16 million members, are all

2:39

trying to find these limited Classic

2:41

Reward seats and there's not enough to go around,

2:44

Qantas have now launched what

2:46

they call the Classic Plus scheme. Which

2:49

is a little bit like a

2:51

rewards seat, but costing

2:54

two to four times more points

2:57

than Classic Rewards, but

2:59

available on basically all

3:01

Qantas flights. Not departments, but

3:03

all the Qantas flights after the Classic

3:06

Reward seats are exhausted.

3:08

Okay. I'm going to start asking dumb

3:10

questions here, Steve. Bear with

3:12

me. The points can be used

3:14

in Classic Plus, in Classic Rewards,

3:16

and in Points Plus. Is that right?

3:18

That's right, yes.

3:19

Okay. There's no distinction between

3:21

the points, as such. Will it, particularly

3:24

once Classic Plus is up and running ... Let's

3:27

say I have 50,000 points

3:30

and I want to use that, I can do a Points Plus

3:32

Pay, . 66 cents, I

3:34

get that. I can try and find and

3:36

Classic Rewards flight still.

3:39

Is that right?

3:39

Yes, that's right.

3:42

Or, on most flights, I can

3:44

use them for Classic Plus.

3:46

The difference being though, Classic

3:49

Plus you need more points

3:51

than you do on Classic Rewards. Have I got

3:54

that in a nutshell?

3:54

Yeah. Yeah, you've got that spot

3:57

on.

3:57

Okay. That's where we stand.

4:00

From Qantas' point of view,

4:03

why ... I'm not sure whether they're being more

4:05

generous in their Classic Plus scheme

4:07

or not. Obviously, it costs more but

4:09

plenty of people have millions of points,

4:12

or hundreds of thousands of points. Is

4:14

it a way of just getting rid of some of those points?

4:17

Yeah, it's a way of just releasing

4:19

that tension that you have

4:21

points but you can't use them. You

4:24

can't use them to find any seats. That

4:27

becomes terribly frustrating, because

4:29

you might have been earning your points over

4:31

months, years, or

4:34

hopefully not decades. Then you go, "

4:36

Well, I want to use them now, but I can't find

4:39

any seats."

4:40

Yeah. I've got

4:42

the seats, I know how

4:44

I can use them. It's

4:47

going to make it easier for travelers, that presumably,

4:49

it will make a big difference.

4:51

It will make a big difference, but only if you've got the

4:53

points. Let's

4:56

take an example of say, going to Europe,

4:58

because Europe's very popular. For

5:01

a business class points ticket,

5:04

which is the gem, which is what everyone wants

5:06

to use their points for, it

5:08

costs about 318,000 points

5:10

to do a business return for one seat.

5:13

Basically, from Sydney, Melbourne,

5:15

Brisbane to anywhere in Europe. That's

5:18

what everyone wants to find. But

5:21

under the Classic Plus system, that

5:23

same seat will cost

5:26

maybe 600,000 points, maybe 800,

5:28

000, 1. 2

5:31

million. It could cost anything

5:33

because the Classic Plus scheme,

5:36

the number of points required is linked to the cash

5:38

ticket price at the time. If

5:41

the ticket price is high because it's peak, then

5:43

you will require more points, whereas

5:46

the Classic Rewards is always the same

5:48

number of points.

5:49

Stay with me, Steve. We'll be back in a minute. I'm

5:59

speaking to Steve Huy, founder of

6:01

iFLYflat. Okay,

6:04

so how do I do

6:06

it? Is there a secret to

6:08

gathering points? Then making

6:11

the most of my points, the most bang for the buck.

6:13

What about gathering points? Is there better

6:15

ways to do that?

6:17

Yeah. Through partners

6:19

is the best way. You

6:22

can't just go buy a million points from Qantas,

6:24

they'll not sell them to you. The

6:27

only way to get large volumes of points

6:29

is through a partner or through a credit card.

6:31

Yeah.

6:32

Partners being things like say Woolworths,

6:35

Red Energy, BP.

6:38

Actually, they've got heaps and heaps of partners.

6:40

Yeah.

6:40

Heaps of different brands. In

6:43

credit cards, where credit cards are offering

6:45

you Qantas points for making

6:47

transactions and spending money, those

6:50

two paths are the best ways to earn points.

6:53

Small businesses or large businesses

6:55

are able to earn these points

6:58

much easier because they've got bills to pay.

7:00

What about the idea of buying an

7:03

economy seat or an economy plus seat and

7:05

upgrading to business class? I may not need the 300,000 or the 600,000

7:08

points to go from Melbourne or Sydney to Europe,

7:11

I might just buy the economy and upgrade.

7:13

Is that a viable

7:16

strategy?

7:18

I will say yes and no,

7:20

and it depends on where you

7:22

sit in the ranking stage.

7:25

Right.

7:26

The way upgrade seats are

7:28

rewarded is that, say on a plane

7:30

that's 300 people, there might only

7:32

be say five or 10 spare

7:34

seats. Those

7:36

300 people probably all put their

7:39

name down to get an upgrade.

7:40

Yeah.

7:42

Who gets it? It's not quite random,

7:44

there's a ranking algorithm and

7:46

it all comes down to what status level you

7:50

are. If you're a Chairman, Platinum One,

7:52

Platinum Gold, Silver, that's

7:54

a ranking stage.

7:55

Yeah.

7:55

It also depends what type of ticket

7:57

you purchased, whether you purchased a fully

8:00

flexible ticket, which is really expensive.

8:03

Most people don't buy fully flexible unless they

8:05

work for a company. Therefore,

8:07

all that factors into the ranking, so

8:10

therefore the top five people will

8:12

get those five seats.

8:14

I haven't got a chance, Steve.

8:16

There's always a random chance.

8:18

There's always a random chance, that's true. Okay,

8:21

if I'm a traveler now, are

8:25

there particular routes or times of day,

8:27

or something rather, that I should be thinking about

8:29

where I'm going to do better probably

8:32

with the Classic Rewards points,

8:34

as you've explained it, as opposed to the Classic

8:37

Plus? Because the Classic Plus and the Points

8:39

Plus are both based on the ticket

8:41

price, so if I

8:43

want to use my points, Classic

8:45

Rewards, is it about looking for early mornings, late

8:48

night, that sort of thing?

8:50

Ultimately, it's a supply and demand match.

8:54

If you're looking for seats where there's not much

8:56

demand, like early morning, then

8:58

people may choose not to

9:00

book them and there's space available.

9:02

Yeah.

9:03

But the thing about points seats is it's like

9:05

fishing. That's the best way I explain

9:07

it.

9:07

Right.

9:08

Every single day, potentially

9:10

every hour, the system's changing.

9:13

If there's no seats for a week, suddenly

9:16

there might be seats. Then, it's

9:19

all constantly changing so there's

9:21

no such easy way as just finding

9:24

these special pockets because

9:26

it's literally like fishing. There could

9:28

be fish at any time.

9:30

Okay, Steve. I'm going to ask the same question

9:32

in reverse. What are the big mistakes

9:35

you see people making when using points? What should

9:37

I try and avoid?

9:39

Ah, yes. Good, yeah. Using

9:42

the points for Points Plus

9:44

Pay are bad. Using

9:46

it for gift cards or redeeming

9:48

them for a gift shop is

9:50

bad because you're actually getting . 5

9:52

of a cent less.

9:53

Right.

9:55

Finding seats and then having a family

9:57

meeting to talk about them means that,

9:59

by the time you come back, those seats will be booked

10:01

by someone else who's

10:04

going.

10:04

Yeah.

10:04

You've got to be fast on your feet. You've

10:07

got to be flexible. You

10:10

might want to fly on the 4th of July, your

10:13

ideal dates, but what if there's a seat

10:15

only on the 2nd of July? You

10:17

have to then decide, " Okay, cool. That's actually pretty

10:19

good, so I'm going to book that seat." Because

10:22

if you're just looking for a very, very specific

10:24

flight, then what you're trying to

10:26

do in effect is looking for ... That

10:29

flight might only have 20 seats and

10:31

you're trying to find one of them, and

10:33

that is very difficult.

10:35

You could be in New York for Independence Day,

10:37

too, if you go out on the 2nd.

10:39

You could. You can leave on the 4th and arrive on the 4th.

10:42

Have you, in your business, found

10:44

a noted uptick since Qantas made

10:48

its announcement a couple of,

10:50

it was probably six weeks ago now or thereabouts? I

10:53

have thought a lot more about frequent flyer points,

10:55

and Jackie and I, my partner and I, we've

10:57

gone and signed up to Everyday

10:59

Rewards and all sorts of things because we're talking

11:01

about it. We're

11:03

getting you on the show here. Steve, have you

11:06

gotten busier since Qantas has done

11:08

its thing?

11:10

Actually no, we haven't got

11:12

busier because what they've done

11:14

is they said that they were going to keep their number

11:16

of Classic Reward seats the same.

11:19

They're committing to your five million number

11:22

of seats, so those five million seats

11:24

across all routes, partners and

11:26

all classes. They said they were going

11:28

to keep the five million Classic Reward

11:30

seats. The

11:33

problem with trying to find these seats has not gone

11:35

away, whereas some people

11:37

have switched from trying

11:39

to find Classic Rewards and

11:41

booked the Classic Plus seats.

11:43

I had a client who's spending 2. 5

11:46

million Qantas points, basically

11:48

her entire points balance, to get

11:50

four people over to Europe.

11:53

But that means that that will be the end of

11:55

her using points for years,

11:58

because when and

12:00

how fast are you going to earn another 2. 5 million

12:02

Qantas points?

12:03

What's the most number of points you've ever seen a client

12:05

have, Steve?

12:07

Well, 40, 50 million points.

12:09

Oh! That's

12:12

beyond me. Steve, thank you very much for talking

12:14

to Fear and Greed.

12:15

My pleasure, thank you.

12:16

That was Steve Huy, founder of iFLYflat.

12:19

This is the Fear and Greed Business Interview. Join

12:22

us every morning for the full episode of Fear and Greed,

12:24

daily business news for people who make their own

12:26

decisions. I'm Sean Aylmer, enjoy

12:28

your day.