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16/09/2011 / loyaltymarketingnews

Qantas Frequent Flyer plans to cash in on exporting its loyalty

QANTAS Frequent Flyer is spreading its wings internationally, with a move to export the expertise that has allowed it to build its huge — and increasingly successful — loyalty program in Australia.

QFF chief executive Simon Hickey said this week that the Qantas unit was talking to “multiple people around the world” about ways they could use the airline’s model to develop similar programs in their own markets.

Mr Hickey said the plan for expanding the business internationally would be built on the program’s success here.

“I think that when we look at what we’ve achieved in Australia, we know we’ve built up a coalition of partners that is the best collation of partners in the world,” Mr Hickey said. “We’ve got all of the major banks, we’ve got the two best airlines in the country, we’ve got the biggest retailer, we’ve got a major telco. There’s not another loyalty program around the world that looks like that.”

Qantas Frequent Flyer membership has increased 45 per cent in the past three years to eight million members in about half the nation’s households.

It has more than 500 partners, and its members last year redeemed 3.9 million seats and 500,000 store products, worth $660 million. Customer satisfaction ratings are the highest in the program’s history, according to Mr Hickey.

“So when we look at that model we realise that the ability to pull that off doesn’t exist everywhere else in the world; in fact it’s quite difficult,” he said. ” So I said, ‘should we take our intellectual property, from a business perspective, and work with others in developing out what they might do in their markets’.”

The QFF chief said Qantas would also continue to work hard on developing the program in Australia, with recent improvements including the addition of Optus as a partner, widening earning capabilities on Jetstar, the launch of the Epicure program for food and wine lovers, and the introduction of a program that allowed low-earning members to use points to earn gift vouchers.

“I think it’s been a very, very busy three years, and I think the program has gone from strength to strength, and I think our members are recognising that,” Mr Hickey said.

He is also confident Qantas can repulse a renewed push by Virgin Australia to get frequent flyers to switch to its Velocity program by matching Qantas status credits and frequent-flyer tiers, warning the strategy could backfire by increasing the smaller airline’s costs without attracting additional travel.

He questioned whether people who took up the status matching would actually change their flight behaviour.

Switching to Virgin would mean giving up the bigger Qantas network of 1000 destinations with 24 partner airlines and more than 500 lounges for a scheme that was “10 times smaller and 10 times less rewarding”, Mr Hickey said.

 

(via The Australian)

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