Qantas argues that allowing government employees to earn frequent flyer status through work trips reduces public spending. The airline says benefits such as lounge access, priority boarding and baggage services improve productivity and reduce the total cost of work-related travel. Virgin, however, contends that these incentives distort the market and give Qantas an unfair advantage.
These concerns are emerging as federal travel policies come under closer review. About 18% of the national workforce is employed in the public sector. Although just 3.3% of Qantas passengers and 1.4% of Virgin passengers are government travellers, their regular trips build significant status points. A Department of Finance review highlighted stakeholder concerns that these perks encourage bias, especially considering Qantas’ extensive domestic network and frequency of service.
Qantas is the sole operator of several direct domestic routes and runs the largest regional network through QantasLink. Virgin, targeting small businesses and leisure travellers as a mid-market alternative, says the ability to earn status credits nudges public servants toward Qantas despite fare regulations requiring agencies to choose the lowest practical fare.
Virgin is calling for the removal of status credits from public sector bookings. This mirrors the 2010 decision to ban frequent flyer point accumulation on government travel. The airline believes stricter enforcement of fare policies could reduce favouritism, cut public costs and support broader competition. Virgin has also started offering lifetime status to keep frequent travellers loyal.
Qantas stands by its loyalty program and describes it as mutually beneficial. The airline points to features like disruption assistance and flexible baggage that support efficient travel. It also notes a wider lounge network, with over 40 locations compared to Virgin's seven, as evidence that its full-service offering warrants continued preference without policy change.
