That is a distinct possibility according to a published report, but Qantas Airways officials have declined confirmation.
Qantas investors could take a direct stake in the group’s lucrative Frequent Flyer arm under a proposal to spin the loyalty program into a separately listed company, according to the report. The group would be divided in two with its Australian investors given shares in the spin-off under a plan the airline is considering.
“According to speculation sweeping the industry, the demerger is a serious option for Qantas as it grasps for any opportunity to garner market support ahead of a likely dire full-year result,” the report says.
The Frequent Flyer program, which has about 10 million members, has been valued at $2.4 billion. That compares with a market value for Qantas only marginally higher at $2.8 billion.
The market is awaiting the results of a broad strategic review that Qantas chief Alan Joyce is expected to release when the airline posts full-year results next month when the airline is expected to announce another significant financial loss.
In March Qantas Airways announced plans to cut 5,000 jobs, coupled with 50 aircraft slated for removal from the fleet as a result of a record $252 million loss.
Qantas officials have pointed to the new Aquire business rewards scheme, which launched March 31, to be as important as the Qantas Frequent Flyer program.
Aquire is 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.
When contacted this week by Loyalty360 for comment, a Qantas Airways spokesperson offered the following regarding the status of the Frequent Flyer program:
“Qantas has flagged that Frequent Flyer is one element of several that we are considering as part of our structural review. We’re aware there is plenty of speculation but the review itself is ongoing and we have nothing new to add. We announced earlier this year that Qantas would be making 5,000 job cuts over a three year period as part of our transformation program.”
Regarding the Aquire program, the same spokesperson offered the following:
“Aquire is a loyalty program specifically designed for small- to medium-sized enterprises that rewards them for everyday transactions. Close to 30,000 businesses pre-registering for the program, and since launch Aquire has proved popular with SMEs keen to build an Aquire Points balance from a range of everyday eligible business transactions including travel, banking, insurance and even parking.
When a member joins Aquire they can enjoy the benefits of earning Aquire Points on everyday business expenses which once converted in Qantas Points can be turned into real rewards. Employees who are Qantas Frequent Flyers will continue to earn their Qantas Points on Eligible Flights while businesses earn Aquire Points.”
Aquire Points can be converted to Qantas Points at a rate of 1:1 which can be used to:
Book flights, upgrades and hotels
Redeem for thousands of great products or experiences from the Qantas Store
Reward and recognise team members
The annual membership fee for Aquire is $179 (inclusive of GST). People who join Aquire before Sept. 30, 2014 will have the first year’s annual membership fee waived.