The "bid now upgrades" will be offered to select passengers on each flight, allowing them to bid with a mix of frequent flyer points and cash. Upgrades will be confirmed 24 hours before the scheduled departure.
The upgrades are designed for frequent flyers who do not have enough points to book a "classic award" for a firm booking of a business class seat or to put in a request for a "classic upgrade award" using points.
The "bid now" upgrades will rank behind both of those in priority, meaning during peak travel times it is unlikely any "bid now" upgrades will be available on a given flight. They will also be a poorer value use of points than class upgrade awards.
Qantas Loyalty chief executive
"For a member who doesn't have enough points to submit an upgrade request for their whole family, bid now upgrades offers an alternative chance to travel at the front of the plane with their spouse and children using a combination of money and points," she said.
"This new initiative will in no way impact the chances of members securing a classic upgrade award. These will always be confirmed first regardless of their frequent flyer tier and they remain the best value option."
Other airlines, including Virgin Australia, offer passengers the opportunity to bid with cash for any empty business class seats. But the Qantas system, which uses a mix of points and cash, is believed to be unique. Qantas will only send the "bid now" upgrade invitation to select passengers on each flight, if business class seats are available. Those that have paid for more expensive, flexible fares might be more likely to receive the invitation, as well as higher-tier frequent flyers.
The minimum number of points needed will be 3000 for a domestic upgrade and 5000 for an international upgrade. A minimum dollar amount will also be required, and Qantas will give guidelines at the time of bidding as to whether a proposed price is likely to have a good or poor chance of an upgrade.
Upgrade bids can be modified or cancelled at any time up to 24 hours before departure. If a customer is not successful, they will pay nothing and keep their current seat.
For flights originating overseas, passengers will be given the opportunity to upgrade using just cash. There are no opportunities to upgrade to premium economy or first class on international flights – just from economy and premium economy to business class.
As an example, upgrading from Sydney to Perth using the minimum 4000 points would require a few hundred dollars in a cash co-payment, while an upgrade from Sydney to Los Angeles would require 5000 points and more than $1000 of cash.
The bid now upgrades system will allow the airline to extract extra revenue for premium seats that would have otherwise remained empty. Qantas has been focused on cutting costs and boosting revenue through initiatives such as flying its planes for more hours of the day and on new routes. The airline last week said it would launch flights from Sydney to Vancouver in the peak June-July and December-January travel periods.