QANTAS has stepped up efforts to stop lucrative business travellers defecting to the newly renamed Virgin Australia by bolstering its frequent flyer loyalty program.
Months before Virgin is due to revamp its own loyalty program, Qantas unveiled changes to its frequent flyer program yesterday, such as increasing the bonus points earned for flying in premium cabins and making Optus an alliance partner. The latter means Qantas’s loyalty program members will be able to earn points from Optus’s consumer and small-business products.
Qantas’s loyalty program is regarded as one of the biggest advantages it has over Virgin in attracting corporate travellers. The frequent flyer division has consistently been Qantas’s biggest contributor to earnings, and helped maintain its investment-grade credit rating.
‘‘We know the frequent flyer program is a huge driver of people’s behaviours,’’ Qantas’s chief executive, Alan Joyce, said yesterday. ‘‘We think that once again this will set our program apart from the rest.’‘
The airline expects to increase its loyalty program membership from 7.8 million to 8 million by the end of June. It would not put a figure yesterday on how many more members it expected to gain from the Optus alliance, which will not be completed until later this year.
Virgin plans to unveil changes to its Velocity program by September, including more perks for members and the chance to earn and use points on more items. It has about 2.7 million members.
The airline has changed its name, upgraded airport lounges and extended its route network through alliances in a bid to boost its share of the corporate travel market from about 10 per cent to 20 per cent.
But Mr Joyce said Virgin’s attempt to snare a bigger share of the corporate travel market had also given Qantas’s low-cost offshoot, Jetstar, ‘‘an opportunity at the leisure end’‘.