Air Freight News

Qantas adds millions of loyalty seats to soothe angry flyers

Qantas Airways Ltd. will make millions more seats available for frequent flyers, but passengers will need to use more loyalty points to secure their tickets, as the airline overhauls a model that had increasingly frustrated customers. The stock jumped.

An extra 20 million reward seats a year will be available on all Qantas flights in any class, the airline said Monday. They’re available for booking immediately. 

Chief Executive Officer Vanessa Hudson is attempting to appease passengers who have struggled to swap their points for flights to the destinations they want. The change, which will cost the airline A$120 million ($79 million) in investment next financial year, adds to a growing list of initiatives pushed through by the new CEO since she took over from Alan Joyce in September.

The points required to book reward seats under the new program, which Qantas calls Classic Plus, will vary like normal airfares. They will be lower during off-peak periods or when booking early, and higher during peak periods.

Shares in Qantas climbed as much as 6.1% as of 11:01 a.m. in Sydney, pushing the company’s market value to A$9.9 billion. With the details of the frequent flyer program changes finalized, the carrier confirmed it will commence a buyback of as much as A$448 million of shares. 

The revamp of the loyalty business underpins its goal to generate between A$800 million and A$1 billion of operating profit a year from the unit by June 2030. The business is on course to deliver earnings of A$500 million to A$525 million in the 12 months ending June 2024, Qantas said Monday.

The airline’s current Classic reward model remains. It typically requires fewer points for a seat but doesn’t offer the same scope of redemption options. Qantas will continue to offer more than 5 million seats under this program. 

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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