New Qantas Loyalty CEO announced

Yes, I see your point perfectly (I think so anyway!) and I don't think it's naive at all. :)

I see it a little differently myself.

From the perspective of the high tier member (WP or P1 let's say) you're going to broadly have two categories of members - those who are mostly doing it for work and aren't toally engaged, or those true road warrior P1's doing full fare triangle routes week in/week out and the last thing they want to see is another plane. I've also met Platinums who seriously had almost zero idea of the benefits of the status or what it meant (even lining up in Y queues for example). The other kind is the more engaged kind (and probably a member of a forum like AFF!) - who aim to get the most out of it, know many of the tips and tricks and their way around the system and have incentive to make that extra effort to keep the status (aside: I wonder how many P1's let alone Plats even know about the reward seat release request option?).

Now from the point of view of an engaged medium(gold) or top(Plat+) tier flyer then yes, your ideas work very well and would provide some incentive to move up (assuming that something like a seat release request - which I think can never be guaranteed for obvious reasons) is something that's desired).

Some thoughts though:

- what if reward seat release is not a primary feature desired by a passenger?

- what if it isn't enough for someone's requirements? If that Plat can have, for example, 2 of them - but they have a family of four they want to get seats for? Is that helpful or not? As a solo P1 though, it would be pretty sweet!

And here's the bigger one for me when I try and think of the bigger picture that isn't just about the "bubble" of higher tier members (and remember right now QF has a huge image issue they are trying to repair).

Say you're a Bronze or even Silver. You do a bit of flying, but not a huge amount. Where is the REAL incentive or positive change for you? It takes a lot of effort (even with DSC) and $$$ to attain Gold, Plat etc and many either can't do this, or simply don't have the need for all that flying or spend(even if they do). I'm thinking here of your VFF type flyer, every so often a visit to an aunt in Adelaidr, or take the family to the Gold Coast during school holidays (and hates the price increase that comes with it). The kind of pax who is far more price sensitive than loyalty minded? None of this gives them ANY incentive in my view.

In fact, even for less price sensitive and those willing to accrue a modest number of points, and possibly low status but with a goal to save up to "take the kids to...." OOL, Disneyland, Bali, whatever.... they're looking for ways to use those points they may have accrued over a number of years.

If I'm one of those types of customers and I see QF giving out all these perks to the elites - which is a goal I probably can't reasonably attain, then it just probably makes it look even more unfair, and that the airline thus doesn't care about their more casual flyers (which is likely a reality, but I'm talking about image).

Remember QF has what 15m members allegedly? the actual VAST VAST majority of these are not Golds and above.

Granted, the levels of engagement are far far less for the majority of those "members" (eg: my sister is a LTB who maybe flies every 18 months if that and I think has her woolies linked, but honestly would just as soon fly VA or JQ if cheaper - yet she's well aware of what engagement can bring as she knows all the travel I do).

Consider the various threads about how difficult it is for lower or no status folks to get access to the "better" reward seats when elites have traditionally had access 353 days out, vs 330 or whatever (I do realise that recently the reward release schedule has changed somewhat). While this has been good for the elites, it definitely makes it less useful for the non status members - and while for a few this may be incentive to move up the ranks (specially when a DSC comes along), the reality is that this is probably not very practical or desirable for most.

If QF is serious with any supposed changes that will please the members then they need to at least have the appearance of doing things for the majority of pax imo. Otherwise it means very little to most people, and the value proposition for these folks is even less, and that would drive them even further to lower cost options like VA, Rex, Bonza etc. The last thing they want to do, I would think, is make changes to reduce the usefulness (or at least the optics of it if not in fact) for the average punter.
amazing write up @RichardMEL - I totally see what you mean and I agree 👊
 
As I understand it, typically in the airline business the "elites" - frequent business travellers - are responsible for the bulk of the profit. But what's interesting to me is that in a frequent flyer program it's possible that the most profitable customers are the non-elites (when taken as a "long tail" group, not individually, of course), because they are the ones least engaged in the program and least likely to optimise both earn and burn. (Someone please correct me if I'm wrong.)

So, yes, changes that appears to benefit the greatest number of people would probably have the most impact, because as far as the Qantas Frequent Flyer profit centre is concerned, they may be the ones they want to keep happiest. (In contrast Qantas Domestic and Qantas International want to keep travellers who fly business/first and flexi fares happiest.) The trick, for Qantas therefore, is designing these changes in a way that still maximises their profit - hence "we're offering millions of extra award flights (even if most of them are for seats we can't sell for cash)" or "we're taking 15% off toasters if you pay in points (which still makes them as - or maybe even more - expensive than paying for them in cash if you'd bother to do the conversion)" style promotions.
 
Consider the various threads about how difficult it is for lower or no status folks to get access to the "better" reward seats when elites have traditionally had access 353 days out, vs 330 or whatever (I do realise that recently the reward release schedule has changed somewhat). While this has been good for the elites, it definitely makes it less useful for the non status members - and while for a few this may be incentive to move up the ranks (specially when a DSC comes along), the reality is that this is probably not very practical or desirable for most.

If QF is serious with any supposed changes that will please the members then they need to at least have the appearance of doing things for the majority of pax imo. Otherwise it means very little to most people, and the value proposition for these folks is even less, and that would drive them even further to lower cost options like VA, Rex, Bonza etc. The last thing they want to do, I would think, is make changes to reduce the usefulness (or at least the optics of it if not in fact) for the average punter.
I'll just say as an example, my partner did not even know what QFF really was about before she met me (I had just shown her FR24 and she plotted 160k km and 130 flights into it so she's travelled a bit), let alone how to go around utilising benefits.

She had no idea how classic rewards worked and never even considered flying J before (and probably won't buy a revenue J ticket unless I really forced the issue) until I dropped points for a J flight. She now just asked "so should I be churning a new CC to earn points?"

I would say that this is more typically common of the behaviour where people would like to learn and be a bit more engaged with QFF program to extract value, but it's a steep learning curve without someone hand holding or doing a lot of research on your own (be it through guides or on places like AFF).

If QF makes a reasonable middle ground where the "experts" would deem - "it's not the best, but it's ok" - that would be a happy middle ground and something like a 1.5x - 2x CR pricing ticket that has more inventory might be one such solution. Right now the answer to "should I use points + pay" is a met with a no (sometimes a very small asterisks about if you just want to burn your points and leave behind QFF).

For some example numbers SYD > LAX on QF11 in Y (J has even better value). Flying next week 41900 + $214. Cash Sale ticket costs $1779. That represents 3.7c per point (which is pretty decent) but even if we halve it at 1.85c per point, it's not great, but if theres nothing better and you really need to fly on those days, it's ok. Compare that with the 0.6c for points + pay that it currently is today.

Off topic - while getting an example I saw that there's a bunch of AA72 F/J awards available to LAX over the next week.
 
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In a vacuum that's fine. The problem is in the current landscape, the general public and masses are the ones not happy with QF and "I've got 500k points as a bronze but can't even find a seat". They're quite common posts in QFF help groups.

To appease the masses you don't want to roll out a benefit that sounds like you're only rewarding a very small subset of elites.

There are 15m members. The vast majority are totally disengaged from climbing the status ladder and being fed doom and gloom stories daily on how cough airlines and particularly QF are.

QFF is the airlines biggest money spinner. If they want to turn around their reputation and keep the hampsters on the wheel then they need to better meet their wants and desires.

“As soon as I have got enough points I want to take the family on a cheap holiday to xyz and I want yy number of “free” seats for the partner and kids on a flight when we go on holiday”

Remember QF has what 15m members allegedly? the actual VAST VAST majority of these are not Golds and above.
To rephrase your statement the vast vast majority are bronzes with zero aspiration to be anything other than that.

AFF is a rarified atmosphere a long way from the daily lives and aspirations of the vast majority of the population.
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As I understand it, typically in the airline business the "elites" - frequent business travellers - are responsible for the bulk of the profit

AFAIAA - No. At least for QF - The loyalty program is.

Agree with the rest of your post.
 
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AFAIAA - No. At least for QF - The loyalty program is.
Apologies, I should have been more clear when I said "typically in the airline business the "elites" - frequent business travellers - are responsible for the bulk of the profit".

I meant that, as I understand it, if you just look at the parts of the business that operate flights individually (ie the Qantas Domestic and Qantas International profit centres - I'm ignoring Freight and Jetstar) and drill down, it's the premium cabin/flexi fare travellers who generate most of the operating profit. The long tail of sale fare/economy cabin travellers up the back add very little.

In the case of Qantas Group overall of course QFF has generated a lot of the profit.

Although, interestingly, I just had a look at the FY2023 Investor Presentation, and in 2023 the EBIT (profit, roughly) for Domestic, and International (incorporating Freight) were both greater than for Loyalty at $1270M and $906M respectively, versus $450M for Loyalty. On the other hand, the operating margin for Loyalty was highest at 20.6% vs 18.2% for Domestic and 11.7% for International. During the Covid years of course it was QFF that helped save Qantas's bacon (along with clever lobbying).
 
Exactly and makes collecting points & status with the airline more useful and makes pax realise the value & potential of the FF program. This will also build loyalty to the brand itself.

Unfortunately for your excellent ideas they would really only be relevant if Qantas frequent flyer was a frequent flyer program. Unfortunately, these days it’s more of a points program. They sell points to merchants, merchants give them away with any purchase by non-flyers and flyers alike, the airline makes a fortune, so are very happy and see no reason to change their model.

Pffft. frequent flyers? They obviously rusted on, so why give them anything?

In a vacuum that's fine. The problem is in the current landscape, the general public and masses are the ones not happy with QF and "I've got 500k points as a bronze but can't even find a seat". They're quite common posts in QFF help groups.

Exactly. All the bronze and simply non-flyers who acculminate huge amounts of points, wanting to redeem in competition with the true frequent flyers.

The non-flyers will keep buying stuff to earn points because they don’t really have much choice other than to keep the dream alive.

That Qantas‘s last major initiative was Points Club,specifically rewarding non-flyers, even with SCs, says it all to me.
 
Most of the analysis around catering to the masses rather than the few elites is sound. My friends who have a 300-500k points have no idea how to use them and always whine about flights being expensive.

For them, they just want access to fly economy from SYD-LHR/LAX/CDG once or twice a year and are happy. I was reading someone on reddit posting that they specifically churn cards to get 4-5 Y tickets a year for their family holidays and that might just be enough to placate the masses. I would hope that they would dangle something for us "elites" as well.

I would really like them to drop LTWP down to reality so I could switch my crediting back to them. Otherwise BAEC it is.....
 
If there are to be changes to the frequent flyer program, as foreshadowed, you would think they’d be delayed a bit now to give the new CEO time to have his say and input.
Mr Glance has come up through the ranks as likely a Company Man. I doubt he would be promoted preaching a new vision that is drastically different from the expected/charted direction of the business. Kuch like AJ to VH.

I don't know him at all so I am not trying to do him a disservice, but I can't imagine much difference.

This isn't really like an outsider coming in with their own ideas and an agenda or mandate to shake things up.

I've worked in both situations of promotion from within via an accepted pathway of "grooming" if you will (or perhaps mentoring) to the expected path and the new bull coming into a china shop. Rarely have I seen existing senior management promoting from within to promote serious change.

Imo only.
 
Mr Glance has come up through the ranks as likely a Company Man. I doubt he would be promoted preaching a new vision that is drastically different from the expected/charted direction of the business. Kuch like AJ to VH.

Yes, but it would be simple professional courtesy wouldn’t it? Otherwise, he’s just a cipher for upper management and someone else’s ideas.

We’ve heard how the previous CEO only promoted people who agree with him so maybe this will be something of an indication of whether that philosophy continues.
 
Yes, but it would be simple professional courtesy wouldn’t it? Otherwise, he’s just a cipher for upper management and someone else’s ideas.

We’ve heard how the previous CEO only promoted people who agree with him so maybe this will be something of an indication of whether that philosophy continues.
I guess time will tell. It is, of course, still way too early to see anything truly concrete regarding VH and her vision or how she intends to run things. This appointment could well be a significant indication though.

I am somewhat cynical though and personally feel that while he will undoubtedly have some ideas and inputs, I feel the appointment from within Loyalty itself signals more likely a "steady as we go" desire than anything terribly radical.

We shall see.

(Given whatever changes are mooted have been in the works for some time as is tgere may be little scope for influence at this point anyway)
 
I feel the appointment from within Loyalty itself signals more likely a "steady as we go" desire than anything terribly radical.
Agree.

Although we have got a bit of an inkling with some relatively recent changes like not releasing all seats on a routine of 12 months out so they are all snaffled by elites before anyone else gets a go and also significantly more seats being released on some routes than previously and points planes on new routes

This just makes me anxious. I wish they would announce them and be done

Jeez only been in the job a week, patience grasshopper.
 
Although we have got a bit of an inkling with some relatively recent changes like not releasing all seats on a routine of 12 months out so they are all snaffled by elites before anyone else

But, in a frequent flyer program, why the hell shouldn't they be snaffled by the 'elites' - AKA frequent flyers, usually VERY frequent flyers to qualify - before the credit-card-churning, petrol buying hoi poli? The traditional structure of a frequent flyer program was - you fly with us a lot and we'll give you nice perks such as lounges, priority and 'free' [sic] flights.

Qantas is a company striving to maximise profits, so good luck to them developing the program so that its more about them selling points to merchants rather than earning revenue by encouraging us to fly with them. But lets not fool ourselves anymore that Qantas Frequent Flyer is about rewarding flying frequently with Qantas.

I used Air Canada Aeroplan a lot in the 2000s and reached their top (P1 equiv) level for a couple of years. But they didn't try to hide the fact that it was a points program, not a frequent flyer program. The call centre you reached dealt with points from many programs and it was very difficult to get sense from them about flight redemptions or issues. Sound familiar?
 
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But, in a frequent flyer program, why the hell shouldn't they be snaffled by the 'elites' - AKA frequent flyers, usually VERY frequent flyers to qualify - before the credit-card-churning, petrol buying hoi poli? The traditional structure of a frequent flyer program was - you fly with us a lot and we'll give you nice perks such as lounges, priority and 'free' [sic] flights.

Qantas is a company striving to maximise profits, so good luck to them developing the program so that its more about them selling points to merchants rather than earning revenue by encouraging us to fly with them. But lets not fool ourselves anymore that Qantas Frequent Flyer is about rewarding flying frequently with Qantas.

I used Air Canada Aeroplan a lot in the 2000s and reached their top (P1 equiv) level for a couple of years. But they didn't try to hide the fact that it was a points program, not a frequent flyer program. The call centre you reached dealt with points from many programs and it was very difficult to get sense from them about flight redemptions or issues. Sound familiar?
I think the veil was lifted on how profitable loyalty programs were when DL used their loyalty as collateral for loans during covid period. And their own valuation on their loyalty put the rest of their business into negative equity compared to their market cap.

In other words, loyalty programs at least in the US are the main source of profit for the airlines and its significantly more lucrative than actually flying planes.

I wouldn't be surprised if QF had very high profits for QFF as well. Also this is one area where they can easily cook the books, since they have effectively created their own currency, their own valuations and be in charge of printing that currency.
 

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