Velocity Chief Nick Rohrlach departs in management shakeup

[ozstamps]

I think that at its core, VA's loyalty team forgot it's a small-ish domestically-focused mid-tier airline with several ad hoc airline partnerships with varying degrees of recognition of VA members. Simply put, they need to make it easier - much easier - to obtain status than Qantas given Qantas' proper alliance membership in Oneworld.

Hopefully, the powers that be are using this promo as a face-saving way to achieve this goal before quietly winding back the changes made last year (or perhaps there'll be nearly permanent 'bonuses' to achieve the same goal).

Let's hope so. Masses of defectors already due to the radical changes, that much is clear, and hard to win back once loyal clients, in ANY industry.

The junior player acting like this, was commercial suicide.

Little wonder no-one has grabbed Rohlach. Decimating a successful FF program is not a great CV highlight! Maccas are hiring, the sign on my local did say today.

 

[MEL_Traveller]

Let's hope so. Masses of defectors already due to the radical changes, that much is clear, and hard to win back once loyal clients, in ANY industry.

The junior player acting like this, was commercial suicide.

Little wonder no-one has grabbed Rohlach. Decimating a successful FF program is not a great CV highlight! Maccas are hiring, the sign on my local did say today.

Customers basing their travel on price are not ‘loyal’.

These changes have had little impact.

Those choosing to fly VA because of $349 business class fares on major eastern trunk routes will continue to do so. They havent all jumped ship to Qantas at $700 one way.

 

[MooTime]

Less status holders is what velocity / virgin are aiming for.
Nobody can argue that.
Next Feb I'll be passing by the lounge entrance..... Well not really cos I often won't even pass thru their terminal.

 

[MEL_Traveller]

Less status holders is what velocity / virgin are aiming for.
Nobody can argue that.
Next Feb I'll be passing by the lounge entrance..... Well not really cos I often won't even pass thru their terminal.

they want valuable status holders… those spending money. They’d be happy with the same number of golds and plats if they all qualify based on $$ (rather than fixed SCs).

 

[MooTime]

Theres no such thing as valuable status holders vs non valuable status holders. You earn it you hold it.
Now that it's a specific cash per SC yes.
They want to make the experience for their most loyal members a better experience, that only means less status members in the lounges. There's no inclination of expanding their lounges in any respect so less members the only answer.
And pretty obvious in past rolarch interviews.
I'm not against it at all, I understand the logic completely.

 

[MH_fan]

Except that it hasn't improved the experience. The lounges are still crowded and I am seeing more people at the service desk checking in with their Velocity Amex card whenever I'm there. The lounge offerings haven't improved either. The whole exercise was to increase profits. They want us to spend more but not make it worthwhile for us to spend more.

 

[odysseus]

Personally, I think it was just him trying to put his stamp on things.

A big revamp, he personally felt it was too easy to 'game' so that was one angle (increasing the cost and making it $ based), prioritisation of VA spend over partner spend, then introduction of lifetime gold viewed as a positive handout, and so sold as a tidy-up that would increase loyalty (by giving a long-term reward), be broadly neutral in cost, and sold to the board to increase spend by capping external earn meaning people would be encouraged to buy VA first (instead of partners), and removing 'discounts' on SCs.

The comments after about lounge numbers which weren't part of anything official was just spin, and not part of the rationale.

Has it achieved those objectives in the short term? Probably mostly. Does that make it a more appealing loyalty program, so encourage people to book VA more because of the program? I doubt it. Does it align with VA's target position of the value section of the market. No.

 

[MH_fan]

Fine to encourage people to buy VA tickets but don't gouge them by making your codeshare tickets so much more expensive than the operating partner carrier. I would expect a slight price difference but not at the level VA are charging. Don't do that especially when you don't have an international long-haul network of your own. That is simply disingenuous.

 

[twinaisle]

Those choosing to fly VA because of $349 business class

They're also quick to say "I paid a lot for this flight"

 

[drron]

In the process of getting J paid flights to SIN in December. How they expect me to pay for the VA codeshare on SQ when the SQ flight numbers get the same 100 SCs. As the VA codeshare $1000 extra for the same 100 SCs.
But I did come up with a new favourite way to fly to SIN. Flying J MCY-SYD then SQ J SYD-SIN comes in just $17 more than SQ direct in J BNE- SIN even on the SQ code.

 

[trippin_the_rift]

Or perhaps were pushed by Bain to follow the currently preferred US loyalty approach tying status directly to spend (except AS).

The US market is unique, and totally fking cooked.
Airlines outside USA trying to copy the US model have been dooming themselves and it's telling.
What works in USA, does NOTTTTT work for the rest of the world.

Theres no such thing as valuable status holders vs non valuable status holders. You earn it you hold it.
Now that it's a specific cash per SC yes.
They want to make the experience for their most loyal members a better experience, that only means less status members in the lounges. There's no inclination of expanding their lounges in any respect so less members the only answer.
And pretty obvious in past rolarch interviews.
I'm not against it at all, I understand the logic completely.

Valuable status holders are the best pax an airline can have.
Having more valuable status holders is healthy for both loyalty & the airline, but after point (VA is well beyond this), growth in premium product is required to grow that valuable base. VA have clearly been trying 'the US model' by chasing more and more and more points earning stuffs, which puts pressure on award inventory, which devalues the premiumness for those valuable status holders.... this perpetuates the downward spiral. VA either need to accept they won't be more than they are today, or invest in being more premium.

There's no right or wrong here.

Personally, I think it was just him trying to put his stamp on things.

A big revamp, he personally felt it was too easy to 'game' so that was one angle (increasing the cost and making it $ based), prioritisation of VA spend over partner spend, then introduction of lifetime gold viewed as a positive handout, and so sold as a tidy-up that would increase loyalty (by giving a long-term reward), be broadly neutral in cost, and sold to the board to increase spend by capping external earn meaning people would be encouraged to buy VA first (instead of partners), and removing 'discounts' on SCs.

The comments after about lounge numbers which weren't part of anything official was just spin, and not part of the rationale.

Has it achieved those objectives in the short term? Probably mostly. Does that make it a more appealing loyalty program, so encourage people to book VA more because of the program? I doubt it. Does it align with VA's target position of the value section of the market. No.

Anything he wanted to do would have been green lit by those higher up, or perhaps even driven by someone up the food chain.
I can imagine the role being more about managing up than actually doing cool stuff. Hard job. I wouldn't want it.

The only real way VA can grow yield and loyalty is to grow. The easist path for this to happen is to do things that Qantas cannot.
That means legit innovation, taking the risks Qantas never would, and probably joining Star Alliance.

 

[Saab34]

Well Velocity has a new boss now, only a few months in, let’s see if any changes come. I’d expect some tweaks, needs to make his mark and so on.

I really think Velocity has been a disappointment post administration out of the group. I feel like the potential is huge but they are just fence sitting.

 

[RooFlyer]

Personally, I don’t give rats about the management . If I can get a well priced business or if needs to be, economy economy fare that gets me where I need to go, I’m a happy camper.

As for the future, I think the only thing we need to keep an eye on is the next profit result. I think the first one under the new strategy was pretty good so we’ll see how the next one goes.

 

[Saab34]

I think the first one under the new strategy was pretty good so we’ll see how the next one goes.

They gave guidance for this FY that impact is relatively minimal and still forecasting increase over LY.

Next FY is the question mark especially Q1 as they are largely unhedged, however they are picking up the $100m expired credits so that should offset some of the fuel hike.

 

[trippin_the_rift]

Well Velocity has a new boss now, only a few months in, let’s see if any changes come. I’d expect some tweaks, needs to make his mark and so on.

I really think Velocity has been a disappointment post administration out of the group. I feel like the potential is huge but they are just fence sitting.

I like Andrew, smart guy, and hopefully his time at MO has shifted perspectives, otherwise, it's bringing in more old QF baggage.
Like the saying - you cannot solve problems with the same thinking used to create them. Needs an entirely new perspective.