Despite several months of speculation centered on a sale, or at least partial sale, of the Qantas Airways Frequent Flyer program, CEO Alan Joyce said during the company’s full-year financial results conference call on Wednesday that the airline will not sell any part of the successful program.
“We also considered the partial sale of Qantas Loyalty,” Joyce said. “Due to the strong support of our customers and partners, Qantas Loyalty is a standout business, achieving a new record result for the year with double-digit growth. After careful consideration, our judgment was that Qantas Loyalty continued to offer major profitable growth opportunities, and there was insufficient justification for a partial sale. To continue to realise the value in Qantas Loyalty, we will be innovating, investing, working closely with our partners, and rewarding the loyalty of our customers with even more ways to earn and redeem Qantas points.”
The Qantas Frequent Flyer program has been valued at $2.4 billion.
Qantas Loyalty recorded its fifth straight year of double-digit earnings growth - another record result in a great business.
Earlier this month, the financially beleaguered airline announced the formation of Qantaspoints.com, which features an Online Mall filled with premium global brands as it continues to expand offers to its diverse member base.
Despite depressing financial numbers, Joyce said they “represent the year that is past, and we have now come through the worst. With our accelerated Qantas Transformation program, we are already emerging as a leaner, more focused, and sustainable Qantas Group. Our work is on track and we will see accelerating benefits in the coming year.”
Joyce said Qantas is undergoing the biggest and fastest transition since its privatization in 1995.
“Our transformation is about working our assets harder, making our business smarter, giving even more to our customers, and reshaping our operations for long-term sustainable success,” he explained. “We are only six months into the program, but we front-loaded many of the more difficult employment and restructuring measures, so we are well ahead in terms of the execution of our major plans.”
By the end of 2015, 4,000 of the total 5,000 job cuts will have occurred.
Regarding customer focus, Joyce said, Qantas is aggressively cutting its costs.
“We are creating even better experiences for our customers, because customers are at the heart of everything we do at Qantas,” he said. “Our targeted investment programs support the Qantas brand promise and yield premium every day, and for the long-term. We are investing in new international lounges, and even better in-flight entertainment. We are updating the cabins of our A330 and B738 fleets. We continue to innovate with great Qantas Loyalty options like Qantas Cash and the aQuire scheme. We keep investing in our people to deliver outstanding customer service.”
Qantas Frequent Flyer membership is targeted to reach 10 million this financial year, with the SME segment of the membership base in many cases already the most engaged in the consumer program in relation to earning and redeeming points.