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I’m sitting in the Qantas First Lounge in Sydney with about 15 acquaintances. All of us are enjoying a four-course meal catered by the two-hatted Rockpool Restaurant, unlimited top-shelf booze and complimentary spa treatments for the four hours before our flight. I sample a glass of each of the champagnes on offer – Taittinger, Veuve and Bollinger – and then go back for more Taittinger before moving on to the reds. After our meal, some of the group enjoy a half-hour massage, while I opt for a facial in surroundings as opulent as any day spa. If we wanted to, we could take over one of the private suites to work, watch movies or TV, or compete against each other on any of a multitude of PlayStation3 games.

My total outlay for all this? The same as my companions: $25.87 for a Jetstar Sydney–Melbourne flight that, anomalously, leaves from the international terminal. A tweet from the First Lounge as we flew away said it all: ‘Watching JQ35 taxi past and thinking there’s about $5000 of lounge food and alcohol on board. And maybe $600 of ticket sales.’

So goes my introduction into the world of travel hackers. They chat in online forums, but share their juiciest secrets at meetings held in airport lounges.

Hardcore travel hacker Andrew Hazelton, 34, recently took a first-class round trip to London, and last week caught a business-class flight to Los Angeles. He travels in a style most of us can only dream about, with first-class airfares in the range of $15,000 to $20,000. In fact, I was on the same flight to London, down the back with the rest of the unwashed masses, but thanks to Andrew’s know-how, I was moved to the best seat economy has to offer. He had also arranged for a flight attendant to deliver me a pair of Peter Morrissey-designed first-class jammies to make those 24 hours that little bit more bearable. And I got to hang out with him in the fancy lounge for the stopover in Singapore.

Andrew is no CEO or trust-fund baby. As a sales representative with Roadshow, he earns an income that puts him squarely in the ‘average’ bracket. He didn’t save for years for the London trip and it’s not a once-in-a-lifetime indulgence either.

Andrew has just about mastered travel hacking, manipulating the system to maximise frequent flyer points and gain status on airlines. The benefits of higher-status levels include access to business- and first-class lounges, better seat selection, more frequent upgrades, priority security and boarding lanes, increased luggage allowance and generally better service from airline staff. Andrew has top-tier status with four airlines and so many excess credits with Qantas that they have awarded him ‘Partner Gold’, which his mother now enjoys.

There are plenty of people in Australia quietly sitting on hundreds of thousands – even millions – of frequent-flyer miles. Andrew amasses most of his through credit cards, obtaining a new one every time a sign-on bonus – which can be between 10,000 and 75,000 miles – is offered, then using whichever card offers the most miles per dollar spent and cancelling the others. He took out five separate insurance policies from a company that offered a sign-on bonus of 10,000 miles per policy and cancelled them as soon as the miles were credited to his account. Total outlay: around $80 for enough points for three round trips to Sydney, or a return flight from Melbourne–Brisbane in business class.

The seasoned travel hacker keeps an eye out for bargains and makes ‘status runs’ – trips taken purely to add to their account, ensuring they retain Platinum, with all the attendant perks that bestows. Over the Christmas break, Andrew decided to head to Paris. He found a fare that would get him a round trip over this peak time for under $1200 on Qantas, with the slight inconvenience of routing via Moscow (he’d booked through Siberia Airlines, paying in roubles).

Andrew didn’t particularly want to go to Europe for Christmas, mind you. It’s just that the fare – and the resulting frequent-flyer miles and status credits – was too good to pass up. A bit like his weekend trip to Fiji earlier in the year when he had no annual leave left. ‘I relaxed the shit out of those two days, you know,’ he tells me. ‘It would’ve been great to stay there for a week but I got the status, I got to see the lounge, I got to hang out by the pool, I got to fly business class.’

Virgin Australia’s announcement last year that it would be ‘status matching’ all Qantas Frequent Flyer elites – that is, bestowing Platinum and Gold frequent-flyer status with Virgin on those who already hold it with its competitor – set the travel-hacking community abuzz. Free status on an airline is the travel hacker’s dream and a group of around 15 newly matched frequent flyers quickly arranged a city hop – flying to four cities in one day – to test out Virgin’s promise of free upgrades to high-status flyers and to sample the lounge offered in each city. It’s unlikely they paid the advertised rates for their flights.

There are sites dedicated to amassing frequent-flyer miles and status – Australian Frequent Flyer and FlyerTalk being the major ones – where anyone can pick up tips on the readily available deals, or the best routing of flights to maximise miles and status credits (hint: one of their catchphrases is ‘never fly direct if you can fly connect’), or the credit cards that will get you flying for free sooner.

But the loopholes in the system that can be exploited to amass gigantic numbers of miles for little money and time are not so easy to find, because once known they are quickly closed up. American travel hackers discovered this recently when the US Mint allowed individuals to purchase one-dollar coins with credit cards, which could be delivered to the purchaser at no cost. Travel hackers soon realised that they could purchase their credit card limit every day, immediately returning the coins to local banks to pay back the purchase and then repeating the cycle. The banks, of course, returned excess coins to the Federal Reserve and the hackers received the frequent-flyer points for using their cards.

To put it in perspective, someone doing this in Australia using an American Express card with a $20,000 limit could amass 30,000 frequent-flyer points per day – that’s enough for a return trip to London every five days.

The Federal Reserve put a stop to the practice when it was shared on the FlyerTalk forums, but not before one individual had enjoyed a month of first-class travel for free. For this reason, discussions of the best loopholes are generally done in person at the meetings, held once a month or so.

The grandaddy of all travel hackers is American David Phillips, better known as the Pudding Guy, a man whose effort has passed into urban legend – although it’s completely true.

Phillips hit upon a scheme several years ago when a food company was offering 1000 flyer miles for each barcode from one of their products sent in. Phillips found the cheapest of the company’s products (individual serves of pudding at 25 cents each) and bought every single one in the state – 12,520 serves in all – which he donated to the Salvation Army in return for them pulling off the barcodes for him. For his $3000 outlay, he not only gained lifetime ‘Diamond’ status with his airline and netted enough miles for 31 round-trip tickets to Europe, but he also received a tax deduction for the donation of the pudding.

It’s not often that such loopholes arise in Australia, but a few years ago American Express offered 5000 bonus flyer miles for every five transactions. Travel hackers were soon making multiple one-dollar purchases on their American Express cards at supermarkets, where there is no lower limit. Not surprisingly, American Express quickly withdrew the offer.

Andrew readily admits that flying, lounging and chasing status has become an obsession with him. He now has Qantas’ new elite tier, Platinum1, to aim for. All of his disposable income is spent on travelling – but when you realise that this means a trip virtually every weekend as well as several overseas trips a year, his lifestyle seems like a bargain. His first-class trip to London was booked using points and he will receive more points and status credits for the flights. Unlike most people, the best part of each trip for Andrew is definitely the journey, not the destination.