In the wake of last week’s announcement from Qantas Airways that 5,000 jobs would be cut, coupled with 50 aircraft slated for removal from the fleet as a result of a record $252 million loss, with 5,000 jobs to go and over 50 aircraft to be pulled from the fleet, the status of the airline’s loyalty program remains unclear.
Many of the program’s 10 million members are concerned about Qantas Frequent Flyer. As we noted last month, at least a portion of the Qantas frequent flyer loyalty program could be for sale, according to a published report in the Australian Business Traveller−as much as 49% of the Qantas frequent flyer program could be sold for between $1.3 billion and $1.6 billion.
Australia had been hit by a 46% increase in passenger seats since 2009, more than double the global increase of 21% in the same period. The job cuts represent just under one sixth of the Qantas total workforce of 32,000 employees.
The Australian government is considering reducing foreign ownership restrictions legislated in 1992 before the state-owned airline was privatized, which would allow the airline to receive a cash infusion by bringing in a new investor or investors.
While no definitive statement came out of last week’s dismal announcement, Qantas attempted to reassure its loyalty program members.
“Let me assure you, however, that these measures will not impact your Qantas Points balance or cause your Qantas Points to expire,” Qantas Loyalty CEO Lesley Grant said in an email blast to the program’s nearly 10 million members. “These are tough but necessary measures to ensure a strong future for Qantas.”
Qantas officials pointed to the new Aquire business rewards scheme, which will launch on March 31, to be as important as the Qantas Frequent Flyer program.
Macquarie and Citigroup are believed to be interested in managing the float of the lucrative loyalty program, which registered a record $1.2 billion in billings during the 2013 financial year and contributed $260 million (before interest and tax) to Qantas, the article noted.
Aquire would be a stand-alone loyalty program tailored to businesses which will be able to earn Aquire Points via their everyday transactions, including travel. These Aquire Points can then be converted into Qantas Points in the name of an individual Qantas Frequent Flyer member. All Australia-based small and medium businesses with an Australian business number can join. Aquire will reward businesses for transactions they already make today, providing businesses with a central Aquire Points account for owners and employees. The Qantas Frequent Flyer program is expected to eclipse 10 million members this year. Qantas Loyalty operates a number of brands across the loyalty spectrum including Qantas Frequent Flyer, Qantas epiQure, Accumulate, and Vii. Qantas Frequent Flyer has seen extraordinary success since launching in 1987.