What Makes The Qantas Frequent Flyer Program Work So Effectively?
If you’re an executive for an emerging airline looking to launch and implement your own frequent flyer program, it is almost all but guaranteed that you have a number of questions. And more than likely, at the top of the list lies the overarching question: “how can we make this cost-effective for us, while also ensuring that our customers are fairly compensated?”
At the end of the day, the answer that you and your team come up with is what’s really going to determine the efficacy of your new frequent flyer program.
Now, while each airline maintains its own particular client base, its own flight routes, and its own mission and goals, there are a few integral cogs in the wheels of the world’s leading frequent flyer program that should definitely be incorporated into your program. Why? Because they’ve been proven effective, plain and simple. One of the most effective frequent flyer programs is held by Qantas – in fact, Qantas’ frequent flyer arm was valued at almost $4 billion as of 2017 – so let’s dive just a bit deeper to see what exactly about Qantas Airlines frequent flyer program makes it so effective for them as an airline, and for their passengers as frequent flyers.
Qantas Airlines Frequent Flyer Program
Before we begin here, let’s first understand exactly what makes frequent flyer programs so enticing for airlines. Originally, they were designed to help reward loyal passengers for continuing to fly with an airline, but as new airlines emerged with cheaper rates, airlines needed to figure out how to continue to entice passengers to fly with them, while simultaneously ensuring the longevity of their brand.
When it came to Qantas, they took an innovative approach to the idea of a frequent flyer program. ABC.net interviewed the Credit Suisse director of equity research, Paul Butler, for a story in July of 2018, and he addressed Qantas’ approach. He said, “About 10 years ago Qantas realized that there was an opportunity for them to commercialize this more widely and it was largely because of how consumers value those points both as a status symbol and as the opportunity to get flights.”
Let’s dissect this a bit.
According to Butler, Qantas saw their frequent flyer program as more of a status symbol, in addition to an avenue for their passengers to secure affordable flights. And the data doesn’t lie: Qantas maintains more than 12 million members on their frequent flyer program, all of whom earned a combined total of over 120 billion points in 2017 alone. In essence, Qantas is doing something right, but what?
Frequent Flyer Points Are A Currency
If you can treat your frequent flyer points as a form of currency, your airline can also reap the tremendous profit generation through an effective frequent flyer program, just like Qantas, who bring in roughly $400 million annually through their program.
Essentially, Qantas lets members of their program “buy” upgraded seats on domestic and international flights, as well as purchase seats directly and book their flights with points. However, the kicker here is that Qantas actually controls which seats are available on which flights, and how many seats they offer through their program, which ultimately ensures a profit with very little costs.
Quite simply, Qantas looks at their frequent flyer program as a way to generate tremendous revenue, maintain a loyal customer base, while also attracting new flyers too – all while keeping their costs down to a minimum.
If you follow in their footsteps, your airline could potentially reap these very same benefits. Is this what really makes the Qantas frequent flyer program so effective? It certainly seems apparent, but until another airline tries to follow the same model, we can only speculate! Learn more about WINGS here.