Australia’s national carrier Qantas will launch 20 million reward seats for travellers in a bid to improve customer engagement following turbulent times.
The new Classic Plus Flight Rewards will make it easier to use points to travel to international destinations including New York, London, Singapore, and Tokyo according to the airline.
Qantas shares are up more than 5 percent at the time of writing on the Australian Stock Exchange (ASX), suggesting the move has been welcomed by investors.
The rewards program will usually require more points than the airline’s existing Classic reward seats, but will have wider availability and will be eligible for upgrades.
Qantas described this move as “one of the biggest ever expansions” of the Qantas Frequent Flyer program in the company’s 35-year history.
The new Classic Plus rewards flights will be available for flights booked today for international flights from July 1, 2024. Points required to book these reward seats will vary depending on popularity, and will be lower when booking early or during off-peak times.
The company will invest $120 million (US$79 million) in the program in the 2025 financial year, including the value of displaced seat revenue and assumptions on future point sales.
However, this financial investment is within Qantas’ planned customer investment of $230 million in the 2025 financial year.
Qantas Loyalty expects to deliver underlying earnings before interest and taxes of $500 million to $525 million in the financial year, and reach 10 percent growth in the 2025 financial year.
In addition, Qantas will also conduct a share market buy-back of $448 million subject to market volumes by June 30, 2024.
Qantas CEO Vanessa Hudson said, “The Qantas Frequent Flyer program is an integral part of Qantas and has always been about recognising our customers for their loyalty. We’ve spent a lot of time listening to members about how we can better reward them.”
Response from Industry
In response, the head of consumer research at the website Finder tentatively welcomed the move.“The problem with Qantas previously was that it was easy to earn points but very, very difficult to use them to book rewards seats,” Graham Cooke told the ABC, noting Qantas had previously hoped customers would use points on hotel rooms and to buy goods from the airline’s website—both are of lower value than actual plane tickets.
“What Qantas have done here is multiply the number of rewards seats available by 5, with the drawback being that the new seats cost a higher number of points—from 2 to 3 times the usual Classic Rewards cost, from my brief analysis this morning.
Competition Heats Up
The news comes after Virgin Australia advised it plans to allow customers to bring pets on planes, subject to approval within 12 months.The initiative would be limited to small cats and dogs on specific flights in a limited number of rows.
Virgin said a recent survey found 70 percent of people would travel with their pet in the cabin, while 57 percent would fly more often if pets were allowed on planes.
Virgin CEO Jayne Hrdlicka said Virgin was thrilled to reveal the plans.
“Our love for animals has always been in the Virgin Australia DNA and we are excited at the prospect of taking off with Australia’s first-ever pets in cabin flights.”
