How Qantas benefits from your bushfire generosity

How Qantas benefits from your bushfire generosity

03 March 2009

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Keen to donate your Qantas frequent flier points to the Red Cross Victorian Bushfire Appeal? Sure you are.

But do you want to donate them at 0.87 cents cash value per point and cede the tax deductibility of your charitable donation to “the world’s most profitable airline” as it occasionally calls itself? Possibly not.

Crikey is getting very angry responses from Qantas frequent fliers to this email.

The devil is in the details, which are found in a new set of conditions which you will find in a sub link to the points-for-donations offer at the Qantas Award Store. The Qantas offers need scrutiny.

If you burn your points in one or more of the three options Qantas provides (5,750 points for a $50 donation, 11,500 points for a $100 donation or $200 for a 23,000 point donation) you do this under the revised terms it applied to charitable points conversions from 24 February.

Condition number one in the fine print says, “Qantas will be entitled to any tax deduction applicable to that payment. Members are not entitled to any tax deduction for this redemption option or any payment by Qantas.”

So you could put together several of these Bushfire Appeal packages which would replace your entitlement to say a $1400 return fare to Perth with a $400 donation for a very worthy cause.

But your generosity also benefits Qantas. It gets the tax deductibility of the $400 payment it makes on your behalf to the fire victims, it avoids any future tax liability for the profit it would make on redemption of those points if in fact they came from a third party buyer, such as a credit or charge card operation, or a hotel or department store.

And if you actually earned the points flying with Qantas, it gets a reduction of the massive surplus of ‘freebie’ points being carried by a frequent flier program it seems desperate to flog off as a float, if only the markets weren’t being so cruel.

There is no doubting the Qantas commitment to bush fire relief. It has donated $100,000 according to the email being sent to its frequent fliers.

But the obvious course of action that the Qantas offer might present to its members is to donate their money directly to the Red Cross Appeal, keep the tax deduction, which is a personal incentive to make a bigger contribution, and keep your frequent flier points.

The Qantas executive general manager Loyalty, Simon Hickey, said this morning “We have offered this option following member requests, just as we provide for options to use their points for other charitable donations.”

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