Qantas’ frequent flyer deal with BP to get the go-ahead

Allansford, Australia - November 25, 2015: Close-up of petrol price sign with car leaving the BP service station in Allansford, Victoria. There are around 1400 BP service stations in Australia.

The proposed frequent flyer tie-up between Qantas and petrol giant BP looks likely to become a reality, with the Australian Competition & Consumer Commission (ACCC) all but approving the deal.

In a draft determination on Friday, the ACCC said it was proposing to grant authorisation allowing Qantas, BP Australia and independent BP petrol stations to collectively participate in the BP Rewards, Qantas Frequent Flyer and Qantas Business Reward programs.

The ACCC is looking to grant a five-year authorisation for these arrangements, which include allowing BP to require BP-branded petrol stations to take part in the Qantas rewards programs.

This would be a condition of new BP petrol station franchise agreements and when existing agreements are renewed.

“We consider that these arrangements will provide public benefits – for example, by giving consumers more opportunity to earn and use rewards program points,” ACCC commissioner Stephen Ridgeway said.

“The arrangements are also likely to provide cost savings to the parties by allowing BP to negotiate with Qantas on behalf of BP petrol station owners, rather than each station owner needing to negotiate individually.

Ridgeway said the ACCC doesn’t think the planned arrangements will have any significant negative impact on competition.

“Qantas has the biggest loyalty reward scheme in Australia in terms of member numbers, and BP is a major petrol retailer. However, there are many retailers, petrol and non-petrol, that could participate as partners in other loyalty programs,” he said.

“We do have some concerns about the potential for consumer harm arising from BP sharing consumer data with Qantas as a result of the arrangements, and we encourage BP and Qantas to adopt the recommendations regarding the collection and use of customer data in the ACCC’s final report into customer loyalty schemes when it is published.”

The ACCC is welcoming submissions in response to the draft determination. It is expected to release its final determination in February 2020.

The ACCC has also granted interim authorisation in relation to BP’s participation in the Qantas Business Rewards program, so that BP’s participation can commence on 1 February 2020.

Qantas announced its plans to partner with BP in September. In the meantime, the petrol giant’s partnership with Virgin Australia’s Velocity Frequent Flyer remains in place.

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