Analysts say loyalty could even play a role in pushing the share price of Qantas from the $6.59 it was trading at on Friday morning to around $10.
In the 2023 financial year, Qantas expects frequent flyer members will earn about 170 billion points and redeem 165 billion of them – evidence of a highly engaged user base. The target for the 2024 period is at or above 180 billion points earned and burnt.The programs work well as a marketing mechanism for airlines – encouraging brand engagement – and even other businesses likethat purchase frequent flyer points to redistribute to their own customers.
Daniel Sciberras, editor-in-chief of Points Hack, a website with the stated mission “to help as many people earn the most points they can”, says frequent flyer points are an effective lure for potential customers. Some of Qantas’ more than 700 partners include BP service stations, tech giant Apple, the big four banks, Woolworths, credit card providers such as American Express, and Optus.Velocity lists just over 50 partners on its website, including major banks and credit card providers, but also Wesfarmer’s Flybuys program and 7-Eleven.
The complication is that the airlines cannot book the revenue from the sale of the points until they are redeemed, so it is classified as revenue received in advance in their accounts. As of last June, Qantas recognised $3.1 billion in unused points in its annual report, and Virgin nearly $438 million.
“Back in the day, anything over 50,000 bonus points for signing up to a home loan, credit card or anything else was unheard of. People may whinge about devaluation, but you have to look at the other side of the ledger,” he says.Velocity is advertising credit cards that come with up to 160,000 bonus points on its website, and Qantas Frequent Flyer cards with up to 120,000 bonus points.
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