$1b Recovery Plan

Accounting for points - a lifecycle overview Qantas Loyalty generates a gross margin on both Issuance and Redemption activity [Not to scale and for illustrative purposes only) Gross margin is only generated on 'external points' [unique compared to other airline loyalty programs) Pre-COVID activity and conditions Fair Value¹ Creating value for our partners Customer acquisition • Customer retention • Increased share of wallet Points Sold to Partners Deferred Revenue Points Businesses (Balance Sheet) Redemption Breakage² Revenue (Balance Sheet] Marketing Revenue (Cash in) Points Issued + Share of gross margin from Consumer Businesses QANTAS MONEY QANTAS SHOPPING Redemption Margin Qantas Group Airlines³ (Non-Cash] Qantas Group Airlines³ [Non-Cash] internal price = ~70% ~40% zero margin Cost of Redemption >600 External Partners (Cash) (Cash out) Points Redeemed QANTAS HOTELS QANTAS WINE QANTAS HOLIDAYS ~60% external price > cost = margin External Providers [Cash) -30% Points Issued Points Redeemed FREQUENT FLYER Trip? aDeal QANTAS INSURANCE 1. Defined per AASB 15, Fair Value includes breakage which has been separated for illustrative purposes. 2. Breakage is recognised at the time of points issuance based on an estimated breakage rate. There is no further recognition of breakage at the time of points expiry. However, the actual rate of breakage is used to inform the estimated breakage rate for initial recognition. 3. Qantas Group operated flights only. |26

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