New Qantas Loyalty CEO announced

[Quickstatus]

So how many points for a bundle of rights?

 

[CaptJCool]

Well the 5 million rewards seats available sounds large until you realise it’s 11.1% of all PAX flown







FFS it’s a flying program
People want to use points to fly in the pointy end because it’s cheaper than paying for the fare
And despite this the operating margin is 20%

So they’re hardly giving the seats away

All the rest is bollocks

 

[kyle]

The one thing Qantas must fix to win back loyalty

Not since the massive peso devaluation crisis of South America in the 1990s have we seen such a currency collapse.

www.theage.com.au

 

[justinbrett]

"as as well as adding more partner airlines. ..."

TK?

And despite this the operating margin is 20%

So they’re hardly giving the seats away

Mostly paid for by the banks, and ultimately those paying interest on their credit cards.

That said QF loyalty isn't paying retail for the seats. I'm not even sure they pay anything on QF metal for a classic reward.

 

[ozflier]

I just wonder whether improvements will apply to non flight redemptions - will "toasters" get a bit cheaper - I'm not very hopeful about QFF enhancements particularly when managed by an accountant !

 

[Fergo747]

I could see them going down more of a revenue based status earning approach similar to some of the US airlines

 

[aus_flyer]

It's pretty simple - make more classic award seats available on routes that people actually want award seats on

 

[Ade]

make more classic award seats available on routes that people actually want award seats on

That's the thing .... different people will want different routes ... not everyone might want CR to LHR or LAX or SFO ... some might want CR to SIN or DPS or NAN ... some might want to DEL or BOM or MAA ... IMHO, if the airline goes down the route catering to majority FFs CR needs, then it might be a huge undertaking ...

What could work is (again, IMHO, & ACK having no knowledge of how QF load & revenue mgmt works) - improve/increase the # of seats that FFs (status-tiered) can request seat release. If there are 3 out of 10 seats WP can request, make it 5 out of 10 seats OR make it one week prior to travel date, instead of 2 weeks or something like that ...

These may not give the *certainty* that a status member can get a seat released, but increases the probability (?, is that the word?). This might make FFs valued.

 

[Ade]

How about this? -

Give FFs status members the option to have 2 routes of their choice opened up as CR each year ... Say this year, As a WP I want to go to CDG (or somewhere in EU), given that I have not exhausted my quota for this year to request CR to be released to specific airport/location (or nearby airport/location), then I call QF and request for the CR seat to be released to that specific airport/nearby airport.

May be next year I want to go to NAN and I can request QF to do that for me ... the usual blackout dates etc might apply or can even be waived off for the given pax once or twice a year.

 

[RichardMEL]

I think @Ade makes a good point there but there's the bigger issue here that there's a bit of a chicken and egg thing here that is the eternal problem.

If a route is popular for reward demand, it's popular for demand full stop. That means ANY airline will be trying to maximise revenue on the high demand route in every class - that's basically their job. This is why they have revenue management teams whoose job is to make the rules per route, per flight and monitor them to get the best mix to fill those seats at the hiughest yield.

This is all airline 101 of course and we all know it so nothing new there.

You mix that with the desire of FF's to have access to more reward seats - of course. So you have the Loyalty "requirements" going up against the revenue management (and yield management) requirements. Most of the time RM will win.

The obvious answer (to me anyway) then is to make reward bookings at a higher yield to the airline. That, of course, means higher pricing of reward seats to the punters.

As has already been discussed here, and in many other threads, the gulf QF has between the currently named "classic" rewards, and the absurdly priced ASA's (aka points plus pay) pricing for revenue seats is the problem. Most other programs have variations on the "saver" and "standard" type structure whre the cost maybe say double or 3x the "saver" amount (but not >10x) but with far higher availability because it satisfies the revenue/yield managers.

So, if I were QF, I'd be introducing this kind of change.

We all know dynamic pricing and revenue based status and all that stuff is coming - it's a matter of when rather than if - but given the current situation QFF is in, creating an equivalent to the "standard" reward pricing would probably at least provide that opportunity for many (specially many who are points rich given how relatively easy it is to earn points) for more reward seat access at far more "acceptable" pricing to the current extremes.

for example, say it's 108k for J SYD-LAX (I think someone quoted that earlier) for a CR seat. How about a "standard reward" seat priced at say 200k-250k? Yes, still a lot, but if the availability was far far better, that could potentially be worth that extra outlay on the popular routes.

The problem with the suggestion to allow for more seat release availability as suggested is that this is great for the high tier WP/P1/CL's out there, but for the VAST majority of the FF base this does nothing, and creates even more of a divide between the "have" and the "have nots" which is probably not the look QF wants right now.

Providing more seats at a higher, but not obscene, points cost may achieve a win for QF. Of course far from ideal, and may would be unhappy, but I think it would also provide a reasonable way to provide for more options for punters.

others mileage will of course vary on this thought.

 

[RooFlyer]

Give FFs status members the option to have 2 routes of their choice opened up as CR each year ... Say this year, As a WP I want to go to CDG (or somewhere in EU), given that I have not exhausted my quota for this year to request CR to be released to specific airport/location (or nearby airport/location), then I call QF and request for the CR seat to be released to that specific airport/nearby airport.

I tell you what , if they did something like that, they would rust me back on to Qantas and I would chase every point I could get knowing that I could actually use them for something I want each year.

Even if it was just one seat on a long haul flight, for most people that would require the purchase of a revenue seat for a partner, etc. and then there would be two revenue fares for the way back.

 

[_TheTraveller_]

How about this? -

Give FFs status members the option to have 2 routes of their choice opened up as CR each year ... Say this year, As a WP I want to go to CDG (or somewhere in EU), given that I have not exhausted my quota for this year to request CR to be released to specific airport/location (or nearby airport/location), then I call QF and request for the CR seat to be released to that specific airport/nearby airport.

May be next year I want to go to NAN and I can request QF to do that for me ... the usual blackout dates etc might apply or can even be waived off for the given pax once or twice a year.

FWIW, I would be ok with this if they kept the existing undisclosed WP/P1 benefit of requesting seats.

If it was between 2 routes (I'm reading this as 2 requests a year) or the current WP/P1 model then I would prefer the current WP/P1 model.

 

[Ade]

I could get knowing that I could actually use them for something I want each year.

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.

And to make it worthwhile for the airline, tie the *loyalty CR redemption* program aligned with the member's anniversary year. So that not everyone in the program wants to redeem their loyalty CR flight during school holidays or during other major holiday/festival seasons. (Was going to say *Festivus*, a nod to TV show Seinfeld )

 

[Ade]

If it was between 2 routes (I'm reading this as 2 requests a year) or the current WP/P1 model then I would prefer the current WP/P1 model.

Sorry should have been clearer in my previous post - I meant 2x requests each year, depending on the FF status (WP or WP1) and may be 1x request for SG. None for Silver or Bronze. My post did not include the specifics to WP1 or SG .. I went with me (WP) as an example.

My intention was the SG would look at this and go "ah man, I need to get to WP so that I can use my loyalty CR redemption twice a year" and Silver would look at SG and go "ah man, a few more flights with QF and I can get the loyalty CR redemption once a year" ... And with QF marketing folks, they will be able to spin this well by adding a $ value to the redemptions "Become SG and redeem loyalty CR flights valued at over $5000 each year" or "Become WP and redeem loyalty CR flights valued at over $10000 each year" etc ...

If someone is Bronze or Silver for over 2 anniversary periods, then that means they are not *truly* frequent fliers anyways, so that loyalty CR redemption might not appeal too much to them, except of course, the novelty of the idea, which will wear off soon.

 

[Ade]

The problem with the suggestion to allow for more seat release availability as suggested is that this is great for the high tier WP/P1/CL's out there, but for the VAST majority of the FF base this does nothing, and creates even more of a divide between the "have" and the "have nots" which is probably not the look QF wants right now.

At the risk of sounding naive/uninformed - I'd have thought that any loyalty program would want to reward their high tier members more than other non-high tier members, so that the high tier members fly more to retain their benefits and the non-high tier members channel more business to the program and attain high tiers?

I mean if QF (or what QF does) looks like it is rewarding it's high-tier members for their loyalty, isn't that a good thing?

I'm trying to think along the lines of "offering valuable, relatable, useable benefits to high tier levels will motivate non-high tier members to attain high tiers" ?

 

[elanshin]

At the risk of sounding naive/uninformed - I'd have thought that any loyalty program would want to reward their high tier members more than other non-high tier members, so that the high tier members fly more to retain their benefits and the non-high tier members channel more business to the program and attain high tiers?

I mean if QF (or what QF does) looks like it is rewarding it's high-tier members for their loyalty, isn't that a good thing?

I'm trying to think along the lines of "offering valuable, relatable, useable benefits to high tier levels will motivate non-high tier members to attain high tiers" ?

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.

A great example I can think of off the top of my head is FBT exemption on EVs. It's a complex scheme and the ones that truly benefit the most are the earners in the highest tax bracket. (The higher your income tax the more you save).

On that note I do expect they'll slip something in for status holders, but also along with other changes that help address the "can't book a seat!?!!!!!!" Crowd. Maybe we'll see LTP be adjusted so that it's achievable. That's probably the lowest hanging fruit for high flyers.

 

[kangarooflyer88]

If Qantas is serious about making notable enhancements to their points earning frequent flyer program, they should seriously consider offering classic awards for merchandise. I think this will give consumers some certainty in the value of your points. For instance, they could offer a 5,000 point classic award of a toaster. Or maybe a 50,000 classic award of a $50 gift card to Woolies, the most Australian supermarket! Sure beats being offered a gift card over mouldy bread.

-RooFlyer88

 

[RichardMEL]

At the risk of sounding naive/uninformed - I'd have thought that any loyalty program would want to reward their high tier members more than other non-high tier members, so that the high tier members fly more to retain their benefits and the non-high tier members channel more business to the program and attain high tiers?

I mean if QF (or what QF does) looks like it is rewarding it's high-tier members for their loyalty, isn't that a good thing?

I'm trying to think along the lines of "offering valuable, relatable, useable benefits to high tier levels will motivate non-high tier members to attain high tiers" ?

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.

 

[Ade]

they should seriously consider offering classic awards for merchandise

#Blasphemy

For instance, they could offer a 5,000 point classic award of a toaster. Or maybe a 50,000 classic award of a $50 gift card to Woolies

#StickAForkInMeForI'mDone

You are probably joking (yea?).... but using FF points to purchase anything other CR seats or upgrades - I consider it blasphemous ... I mean, this will seriously undermine the value of the FF point ... OMG!!

OTOH, it might be a good way to reduce the points liability that is upon QF due to point earn from non-flying is > than points earn from flying ... And in the long run reduce the number of customers who have 7 digit point balances, without status - as they can't *easily* redeem their points for CR or upgrades, unfortunately.

 

[RichardMEL]

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.

What I was trying to write but put so much more succinctly thanks !!