Australian Government looks to frequent flyer points to slash travel costs

Australian Government looks to frequent flyer points to slash travel costs

The federal government is looking to rein in the travel costs of around 100,000 government workers by using airline frequent flyer points to book their travel.

Complementing the already-discounted fares available to government departments, the idea could see any frequent flyer points earned by public servants on official travel pooled to a master government account.

The government would then use these points to book flights for its travellers, rather than paying cash for every journey.

It's estimated that such a measure could slash upwards of $50 million in costs from the federal government's annual $377 million flight budget by making around 180,000 flights near-free.

Government travel and frequent flyer points

Passengers booked on government-funded flights are currently prohibited from earning frequent flyer points of their own, and also can't share these with the government if points were to be awarded under the existing system.

Travellers on 'Whole of Australian Government' (WoAG) fares may attach their frequent flyer number when they travel, but airlines are required to ensure that points aren't awarded on these tickets.

When given in error, airlines must also invalidate points given to government travellers: although earning status credits is deemed fair game.

That's because status credits allow travellers to earn free lounge access by reaching the Gold, Platinum and Platinum One tiers –  keeping those otherwise-expensive lounge memberships off the government’s balance sheet.

However, the nation's public servants would stand to earn fewer status credits each year by flying on tickets booked using frequent flyer points, rather than cash, making the optimal solution a delicate balancing act.

Also read: Qantas Aquire: earning frequent flyer points for your business

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Chris Chamberlin
Chris Chamberlin is a senior journalist with Australian Business Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!
 

17 comments

  • Tom Goddard

    TomGoddardd

    16 Jul, 2015 10:17 am

    Would make a lot of sense, not too sure if the airlines would be too happy about this though...

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  • Satoshi Takayama

    Michael Kao

    16 Jul, 2015 10:21 am

    Also that means less award seats for us....

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  • TheRealBabushka

    TheRealBabushka

    16 Jul, 2015 10:37 am

    Wow...2 things to consider:

    1. The knobs in the civil service don't quite get the concept of award/redemption travel.
    2. The relationship between the 2 big airlines and the government is in such an unhealthy state that these private companies (airlines) are incentivised/coerced into a non-commercial arrangements.

    I'm not sure which of the two is worse...

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  • undertheradar

    undertheradar
    Banned

    16 Jul, 2015 10:46 am

    and maybe the airlines could link their F/F with helicopter companies too...sorry...couldn't resist

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  • SimonACT

    SimonACT

    16 Jul, 2015 11:19 am

    Total agree with this story, as I travel to Sydney from Canberra twice a month, would save the commonwealth a bucket load of $$$$ each year. It is not always with the same airlines. Having said that, i think virgin is the better off the two; as on goverment ticket we get access to the virgin lounge, this is not the same for the red roo.  Even though i dont use this access when travelling on these trips, when i travelling on other routes its is nice to use the lounge access. 

     

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  • kimshep

    kimshep

    16 Jul, 2015 11:41 am

    Given that the current contract sees no Frequent Flyer points awarded (but Status credits included), it doesn't seem too far fetched to see that such a change in Government policy would probably see QF increase their Tender offer / price to Government in order to offset the cost f this additional burden.

    Since this is a direct B2B transaction, the "cost" of awarding Frequent Flyer points to Government employees would certainly and directly impact QF's bottom line .. as as we all know, QF is a business - not a charity.

    The equilibrium here will depend on exactly *how* much these additional QF costs (once factored in) will result in an increased tender amount.

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  • riley

    riley

    16 Jul, 2015 12:24 pm

    Thank the viscious 24hr news cycle for this. Running front page (advertisments) on public sector travel expenses. These are people spending a lot of time away from their families, allow them the benefit of their travel!

    FYI I don't work for the government. It's this small mind mentality that annoys me to tears.

    Dr Michael Fullilove did a great speech on this subject at the Australian Press Club last year. How America celebrated Hillary's travel miles and we punish anyone who dare fly business from Perth to Sydney, despite making the treck weekly!

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  • undertheradar

    undertheradar
    Banned

    16 Jul, 2015 01:07 pm

    what annoys me to tears is those who compare us to the U.S

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  • riley

    riley

    16 Jul, 2015 03:32 pm

    I can see that. I'm by no means pro-american, quite the opposite. But we benchmark ourselves and mimmick america in so many ways. We see ourselves on the big stage internationally yet we penny pinch when it comes to givernment sector travel and travel allowances. If it were the private sector, they couldn't hang onto their best talent under those conditions!

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  • hutch

    hutch

    16 Jul, 2015 02:52 pm

    Surely one of the reasons why Gov air fares are so damned cheap, is that they don't earn ff points. Isn't this a false saving then? Wouldn't the airlines just increase the cost of airfares to cover the points being handed out? 

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  • aaflyer

    aaflyer

    17 Jul, 2015 12:31 am

    exactly.   if the govt feels pinched from overspending on air travel it should negotiate even lower fares not mess around with trying to get "free" tickets.   or, perish the thought, travel less...

     

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  • dinkydie

    dinkydie

    16 Jul, 2015 04:15 pm

    If the govt were on reward tickets they'd crack down on "fuel surcharges" in no time! :-) So please do go ahead!

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  • Simon Grant

    Simongrant04

    17 Jul, 2015 10:32 am

    I think it is important to understand the nature of the overspend rather than look at further ways to save money. Bronwyn Bishop highlighted that to us this week with her ridiculous helicpoter flight to a party fundraiser.

    Get tighter on the conditions of travel and when you travel. Someone mentioned above the need for travel and stop pennypinching for people who travel regulary and that the private sector would treat them better. The private sector would also not allow frivolous spend. I travel a lot for work and we take cheapest fare possible, occaisional flexi and no business under 7 hours of travel even if it is Perth regularly. If you collect status credits as allowed in this story, those frequent travellers would be platinum and as such accrue those rewards which include upgrades (at least on Virgin). Use a flexi, then use those for business when you need it.

    There are a lot of public sector travellers (as there are in business) who take the mickey. Stop funding 90 year old prime ministers to travel the world on the public coin when they are pulling down 6 figure ongoing compensation year on year if you want to save money.

    Rant over.

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  • JAMWIE

    JAMWIE

    17 Jul, 2015 11:09 am

    Hmm with Diners card as card program and the pooling that they can do ....just a few million points although I presume they have gone for the rebate ...

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  • hossein_au

    hossein_au

    17 Jul, 2015 12:48 pm

    This is a "nice" news story, but nothing more, I don't think. Based on Whole of Government agreements (as alluded in the article), government-funded flights do NOT accrue any frequent flyer points whatsoever. So, even though the story sounds interesting and news-worthy for an average Joe, I wonder where all of those frequent flyer points the government wants to use for booking flights are supposed to come from??

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  • Chris Chamberlin

    ChrisCh

    17 Jul, 2015 01:04 pm

    The points would come the government changing its policy on frequent flyer points – the fact that points aren't awarded and must be reversed if issued in error is a government policy, not an airline policy.

    The proposal put forward by the Department of Finance, if successful, would see the return of frequent flyer points but have them sent straight to a master government account rather than trusting each traveller to personally redeem them for work purposes.

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  • hossein_au

    hossein_au

    17 Jul, 2015 01:57 pm

    There lies the fallacy of this approach... the current WoG agreement was negotiated based on not awarding points. If the airlines are asked to award points for WoG flights, they will have to increase their fares to cover their costs, defeating the purpose of this knee-jerk reaction!  This is penny-wise and pound-crazy on steroid!! 

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22 May, 2019 05:11 pm

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