Qantas FF announcement 20 June - "biggest overhaul" in program history

[JessicaTam]

What could possibly go wrong?

Hmmm, that sounds familiar.

Maybe LTWP

I reckon that might be a possibility, and a bit annoying as I have started my journey to the BA equivalent already.

Having lived through a major change in 1998, a Huge devaluation in 2005 and more recently, "Simpler and Farter" ™ parts 1 and 2 more recently, It does suggest indeed something really really significant.

But, no - I expect (as usual) the hype of that sentence to exceed the actual reality.

Best autocorrect ever!

 

[Hvr]

Best autocorrect ever!

You're assuming it's auto correct. It might just be a lot of hot air.

 

[samh004]

Hopefully you get at least 3 months notice for a change to something like LTG or longer.... I cannot imagine them changing the goal posts without notice.

It would be nice, but can't do much but speculate at this time. Hoping for the best.

And for what it's worth, not totally averse to EQD's etc... so long as I have my safety net intact. But without the safety net, I'd be free to fly whomever I liked and while I understand I'm just one frequent flyer, you should never take loyalty (and upsetting customers who think of themselves as loyal) for granted.

LTG, but EQD for WP might mean I'm never WP again, but I am still going to spend more cash to fly QF as I get lounge access. Conversely, LTS with no more prospect of LTG would mean I have no reason to pay for higher fares.

 

[CaptJCool]

Hmmm, that sounds familiar.


I reckon that might be a possibility, and a bit annoying as I have started my journey to the BA equivalent already.


Best autocorrect ever!

The annual re-set or lifetime levels must drive a pile of customers AWAY from buying tics. Eg as mentioned above. And from former workmates, now they have to pay for fares, they tend to “go elsewhere”. Loyalty is a TWO WAY STREET

For good reason an airline can CHANGE this to once achieved a level. Never need to drop back. THIS ANNUAL RE-setting basically says, we don’t value your past loyalty, only your immediate spend. Long-term relationships are give and take.

I got more to add, but will do in a tic

 

[trippin_the_rift]

What's wrong with a revenue based system?

There are pros and cons. I'm familiar with an airline that moved from static award inventory to full dynamic redemption.
I doubt Qantas will move in that direction. Qantas like to let others lead and slowly follow once there is no risk. The downside of moving to full dynamic still outweigh the upside. As I said in a previous post - there is no full-service carrier anywhere in the world that has seen an increase in profitability from shifting to pure dynamic. Plus, Qantas already have dynamic pricing! More likely to introduce 2-3 buckets of award seats similar to basically every other major airline.

I wrote this article on the recent United Airlines changes where they are doing exactly that (increased award inventory buckets) but not telling members the actual cost in miles. Read it here: United Airlines Breakdown: MileagePlus Loyalty Program Changes

Sarcastically - if not already on the agenda, AJ should add use of points for treatment for nuclear levels of anxiety amongst AFFers on what might or might not happen.

The probability of my guesses being any better that other AFFers is unlikely to be better.

However if I was CEO I would be looking at:

• How to neutralise any benefits perceived or claimed by Velocity, not currently in QFF.

Think about where QF Loyalty derives its cash. Banks.
Velocity is the same.
Outside of these two - the next biggest 'competitor' are major foreign airlines that have massive ASK into Australia.

Between Asia Miles, KrisFlyer, Emirates, Delta and United - I'm guessing that share of bank points being converted to those programs combined could be as much as Velocity transfer business. That's an easier and more profitable segment to chase when considering the bank points/co-brand to airline tickets correlation. Here's a diagram I whipped up to illustrate!

• How to drive people to utilise their points without costing the company $$ - perhaps drive them to unused capacity somewhere, gimmicks like QFF plane to Japan

Likey!

• How to limit or modify the gaining of Lifetime privileges which are an increasing liability on the company

There is virtually zero liability from more folks having lifetime status. The risk is that these members achieve the status and never fly Qantas again. From the endless pages on this forum about ppl achieving LTG then disengaging, it's a trend. QF can easily solve this by giving LTG members a benefit of 600 'starting credits' each year. In that sense, there is likely to be additional 'spend up' from LTG members AND Platinum members who are now close to the next reward or close to P1. I've been harping on about this for years to Qantas management. Fingers crossed!

• How to gain patron kudos introducing something that doesn't really cost the company anything but is perceived as a significant improvement by patrons (and perhaps induces them to squander points)

Similar to your other idea. It's only a matter of time before Qantas realise how many millions they've been losing by not charging people to earn double status credits. Charge in points for additional value creation in QF ecosystem.

• How to increase market saturation in their market areas - already more adults in AU have a QFF account than those who don't.

The fact is, outside of Australia - Qantas & collecting Qantas Points doesn't register on peoples radar.
Generally, QF is seen as expensive to fly, poor transfer rates (if bank transfers are even possible), no co-brand opportunities, poor burn rates, expensive upgrades, limited network unless constantly travelling to AU/NZ.

IMO the biggest opportunity for 'Qantas Loyalty' outside AU/NZ is to start a new business in Asia.

- Call it "Jetstar Rewards" and offer it as the default Jetstar program.
- A new currency, link/transfers to QF to keep customers within the Group. Aka: de-couple existing Jetstar points earning from QF and transfers that value into JQR. Keep existing JQ/QF FF on-ground benefits (lounge), and introduce a currency transfer from JQ -> QF as to not lose the die-hard QF fans.
- Different look and feel to traditional FFP
- Base it in Asia
- Get on the co-brand train in SEA markets (where other low-cost airlines are racking in the cash from the banks)
- A simplistic program to drive SEA customers onto Jetstar, riding on QF Loyalty air+non redemption opportunities in the backend
- Reward passengers based on ancillary spend instead and reward the 'right' behaviour. Thus the ability to generate more points is increased, and scales by pax spend and doesn't affect ticket prices.
- That basic idea will pick up the 'high-yield yet LCC focused' pax segment
- Plenty more benefits to QF that I won't list here [contact me if you want to know]

Heck, I'd structure the commercials right so the Australian Government funds the development and rollout of the new program!
Plus I'm sure Jetstar is itching to expand in a way that compliments Qantas.

QF Loyalty needs to move beyond Australia in order to maintain momentum. Shareholders should really be demanding this type of strategic growth.

 

[grrofunger]

I'm betting on dynamic points redemptions, changes to upgrades process and rejigging of status tiers

I don't think earn rates will be affected but there will be an element of elite status devaluation (due to increased availabilities for lower status members)

So many people out there (bronzes and silvers) whinge that they have 1 million points etc all earned from never flying and complaining they can never use them on flights.

So opening up things like points planes, "easier redemptions" (at greater points cost) etc etc - will seem positive to the masses

 

[odysseus]

Switching to an Airbnb distribution channel?

 

[CaptJCool]

Gamification

Who plays a good game ? We do.

No matter what QF do, they will continue and we will find positive use of whatever FairPay system they end up with after the overhaul.

So I’ve considered this from the upside of the customer experience...

I’d like to see dynamic status credit offers instead of leg based SCs - if you buy today we’ll double your status credits. Boost offers to leisure travellers etc

BTW QF would have a better view of Australians income and spending patterns than the ATO. So ideally offers ought be able to be personally tailored to every individual (eg throw in free travel insurance if you book today)
Will the ring fence around the ‘sacred cow” of fares only Status be removed?

• Formulating the right decisions through portfolio integration
• Capturing untapped revenue opportunities usingadvanced analytics

Fare families and
Family pooling, more incentives for leisure travellers akin to business rewards .
Discount offers based on previous period points earnings ?
All customers offered points upgrade based on personalised capacity to pay instead of the existing UpgradeMe deal.

Real Time random discounts - congratulations you’re the 200th customer today so we have awarded you a $50 gift voucher...
Poker machine style discounts. Now the fares been ‘chosen’ would you like to roll the dice n a dynamic discount offer -
Or Something like flight centres price drop insurance

Switch flight offers - we noticed you’ve booked this flight but are you willing to switch flights for a $50 voucher
Flight add-ons. Buy express path pass, purchase a lounge invitation,
Free loyalty determined flight add-ons. Eg Abolish credit card surcharges, free alcohol vouchers
Cheaper J class lite fares following EK example

And for those following along at home who like reading more detail.

This was a really interesting article. Revenue per customer vs revenue per seat

The evolution of airline revenue management: Defining the next generation approach

Although business challenges continue to evolve for airlines, they still center on the need to increase profits, productivity, and responsiveness to market changes while also improving customer experience. Overcoming these and future challenges requires a next-generation revenue management...

www.sabre.com

A novel architecture to monetize digital offerings - Journal of Revenue and Pricing Management

As commerce continues to shift to the digital domain, organizations respond by improving and evolving their approach to creating value for customers. When the time comes to convert digital anything into cash they can bank, the same organizations, however, seem stuck in time. The purpose of the...

link.springer.com

And then there’s Amadeus

Amadeus Altéa Network Revenue Management | Amadeus for Airlines

Maximize profitability with this next generation revenue management system (RMS).

amadeus.com

Revving up airline offers with science and technology

It’s time for airlines to embrace a transformation that’s already underway when it comes to data, pricing, and promotion of customized offers.

amadeus.com

A spotlight on 'Total Offer Optimization'

Fast forward to customer centric revenue management.

amadeus.com

https://amadeus.com/documents/en/airlines/infographic/spotlight-on-total-offer-optimization.pdf

https://amadeus.com/documents/en/pdfs/infographic-destination-x.pdf

Moving airlines towards a Competitor-Aware Revenue Management System

The holy grail of Revenue Management for airlines is to construct a truly Competitor-Aware Revenue Management System (CARMS). Here's how we're doing just that.

amadeus.com

Insights

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PS my foray into big data analytics had some benefits and I’d be interested in hearing views of @trippin_the_rift

 

[Happy Trails]

Will the ring fence around the ‘sacred cow” of fares only Status be removed?

• Formulating the right decisions through portfolio integration
• Capturing untapped revenue opportunities usingadvanced analytics

Yes, my thoughts exactly.

 

[trippin_the_rift]

<lots of cool stuff snipped out>

PS my foray into big data analytics had some benefits and I’d be interested in hearing views of @trippin_the_rift

Feeling the love! Thank you

In my experience, vendor articles are vague in nature and they have an agenda to sell their latest whizz bam product.
I give a lot of information away for free on my site to help drive forward the loyalty industry and deliver better outcomes for both the customer AND the business.

QF is pretty good with data and analytics. Some examples you can see how they're using it and others not so obvious.
So long as there is a simple path from data ingestion to creation of inferred data, to commercialising that insight - most companies are on board with the idea of investing in analytics. The ROI can be fast with the right creative/commercial balance.

 

[justinbrett]

I guess at the end of the day, QF FF makes them a lot of money, they’d have to be very careful not to kill the golden goose. It’s not like they’re trying to make an unprofitable arm of the business more profitable.

That said, if they think there’s juice left to be squeezed, they may give it a go.

 

[ozflier]

That would be a very frustrating change. Hope that doesn’t happen. It would certainly make LTG much less attractive to aim for. Lifetime lounge access is one of the main reasons to aim for LTG.

Qantas Lounge access domestically is of little value to me - stockyard atmosphere , so so food and low range wines.

 

[ozflier]

I have many friends who accumulate heaps of points thru credit cards , shopping etc .
And little thru flying so no status and no priority when it counts.
Maybe QFF could be considering converting some of this non flying spend to status credits ??

 

[mviy]

Qantas Lounge access domestically is of little value to me - stockyard atmosphere , so so food and low range wines.

If I’m flying J anyway anything less than FLounge is of little value internationally.

Domestically I rarely fly J and I value lounge access so removing domestic lounge access would take away a lot of the point to achieve status in the first place.

 

[Pushka]

I have many friends who accumulate heaps of points thru credit cards , shopping etc .
And little thru flying so no status and no priority when it counts.
Maybe QFF could be considering converting some of this non flying spend to status credits ??

I think you need to spend some money on flying before receiving the benefits of status.

 

[harvyk]

Qantas Lounge access domestically is of little value to me - stockyard atmosphere , so so food and low range wines.

Remember that you're one of the privileged few who have seen behind those frosted doors, and one of the even fewer who have done enough times that it's now meh.

The vast majority of QFFer are NB or PS, and thus lounge access still remains an asperation.

 

[onemore]

I am currently overseas where there is a time difference of only 2 hours, so tomorrow morning instead of pouring over the newspapers after breakfast my first priority will be to log on to here to evaluate my future preferred airline.
To date I have been a platinum member for the last ten years, the last five being out of my pocket, in that time I have had one upgrade to business class, not that I had expected more because them are the rules.
So like many others here I am cynical of another enhancement and no use complaining just vote with my feet.

Just saying.

 

[AisleSeat]

You know how with VFF, you can use you points to pay for petrol at BP?
I wonder if QF will be announcing a similar thing (along with everything else): use your points to pay for things, like a regular currency (with select partners of course).

 

[NoName]

Going like Facebook and making QFF points a cryptocurrency?

 

[TheInsider]

Going like Facebook and making QFF points a cryptocurrency?

They have looked into it! So it could be a possibility.