Qantas frequent flyers are great at accumulating points – they always have been. But Qantas has to help them get better at spending the points to shore up its loyalty proposition.
Already a subscriber?There is a simple reason why Qantas is making it easier to use frequent flyer points – all those points are burning a hole in customers’ pockets.
At its peak, frequent flyers were earning about 40 per cent more points than they would redeem in any one year. The gap was 17 per cent in the six months just gone. They watch their frequent flyer balance closely – people in the airline industry will tell you that frequent flyers track their points balances closer than their superannuation balance – and want to cash in.Now we know these customers like flying and special treatment – that’s why they are in the frequent flyer program or signed up for a Qantas-branded credit card in the first place.
Macquarie’s analysts say the restructure rectifies the problem. “Combined with tier FF members getting different levels of access to the seats, the risk was increasing that perceived value of the points was declining for many members, as they struggled to redeem them,” the analysts told clients on Tuesday morning.“Whilst alternatives for redemption on classic are available, they are low-value options, no better than the competitive program offers.
Classic rewards plus flights will be sold under a new variable pricing system and will kick in once the base-level classic rewards seats are sold out.
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