Yesterday I was invited, as a member of the Australian Frequent Flyer forum, to attend a lunch with the key team who run Qantas Frequent Flyer. They wanted to answer questions about the recent changes just implemented, discuss other aspects of the program that they have been working on, and also hinted at a few new opportunities along the way.

From Qantas Frequent Flyer, there were around 7 people including Lesley Grant, the CEO of Qantas Loyalty, Stephanie Tully, Qantas Frequent Flyer’s Chief Marketing Officer, and Justin Hyams, the Executive Manager for Loyalty Operations (which was described as being the role that looks after the airline part of the loyalty program). There are some bios of them here if you’re interested.

To their credit, they all stepped up and answered a range of questions thrown at them – some answers more specific than others. They all acknowledged the comments and feedback from those who are actively engaged in their program, to the point that they discuss the minutiae of the program in great depth online, can be very valuable.

My thoughts?

The lunch was a great way to communicate with their most engaged members. I would hope they would also engage other very loyal members who don’t engage in online forums or media in a similar way to ensure they have their say.

One of the biggest things that struck me from the discussion around the recent changes is that while, to give Qantas Frequent Flyer their dues, they did give good notice, there was still of course a lot of adverse press and negative reaction from members. At this point, any change is a bad change, even it has positive and understandable elements for members. They are damned if they make any changes at all at this point.

Given that, I think there’s a lot of value in them considering a more frequent, but consistent time in which they announce changes, to manage member expectations. Setting down a framework by which members can expect changes to occur, similar to the way many hotel loyalty programs work where a yearly review of properties in different bands, could be really helpful.

If Qantas Frequent Flyer went to a system of yearly reviews at a consistent date, then members would slowly come to expect changes, tweaks, improvements and devaluations in a much more orderly fashion. It would give Qantas the remit to make minor award chart changes, especially where there are benefits to members, and help manage member expectations. Iteration, iteration.

I expressed this thought to the team and I hope it gets considered.

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Themes discussed

What follows is a brief overview of what I thought were the noteworthy themes discussed, both in the Q&A sessions and during more informal chats with the team.

On why they made the recent changes to points earn and the minimum points guarantee

Justin took this question and outlined their thinking pretty clearly here. He acknowledged that Qantas were fairly unique globally in having a minimum points guarantee, and that they also hadn’t made any changes to earn rates in a long time.

It was outlined that they had looked at other models for points earn, including revenue-based points (similar to Virgin domestically, directly tieing points earned to the fare paid), but had put them to one side as doing that for international travel didn’t really work and they were keen to keep the ‘flow’ between the domestic and international earn rates – which I think is valid, and I’m glad it’s been clarified that this is definitely not something Qantas are considering for the time-being.

He stated that he feels 800 points as a minimum is still a rewarding number for low-fare Economy travellers, given the possible rewards on offer for those points by Qantas, and that the additional points and status credits on offer for the new higher-end flexible Business fare bucket was also an improvement for those who take it up.

The messaging was consistent with that given on the announcement – that their intent is to make the system behind earning points simpler and fairer. Whether they’ve accomplished that is a matter of opinion, but one point that was highlighted is that they feel they’ve simplified the points earn by moving away from the distance to zone-based earn structure, and the status credit earn by simplifying the current table of earn on different partners into one consolidated system.

However, the devil is in the detail here as in the London to Singapore example given in the next point, so they do need to go back and make a few tweaks in future, in my opinion, to not penalise flyers that have no other option but to fly a partner.

What about the award table – will zones realign to match points earn?

The issue here is that there are now two zone-based tables – one for points earn, and one for redemption. There’s concern that the realignment of the redemption table to the new earn table could impact on the value proposition for redeeming your points.

Justin again took this question and acknowledged these concerns, saying that currently there are no set plans in place to change the award tables. However he did allude to the work in this area being done in future, but in a slow and steady to make sure Qantas Frequent Flyer don’t make their awards more expensive.

On how the Qantas route network impacts the loyalty program value

It was clear, in case you’re unaware, that Qantas Frequent Flyer is for most purposes a standalone part of the Qantas business. Yes, they converse regularly with Qantas (the airline), but only have so much insight and influence over Qantas operations and network.

Adelaide, Darwin and Perth all came up as sore points as holes in the network for either or both international and domestic travel, both in the way that Qantas rewards their frequent flyers who travel out of these (now under-served) ports, and how the network decisions influence their loyalty to the airline and frequent flyer program.

Given the remit of the team in the room, they were very understanding of the issues here but understandably only have so much influence in rectifying the issues at play, citing economics and route viability as a decision that gets looked at constantly, and that Qantas simply won’t operate on unviable routes.

One thing that was promised to be taken on board and considered in future were the specific routes where Qantas was effectively penalising Qantas Frequent Flyers who fly on oneworld partners, and where there is no other real option but to fly with that partner.

A prime example given was the new status credit earn rates on Singapore to London (where you can only fly British Airways directly on the route). This, and others, were noted by Justin as areas that need looking into for revision in future. You can hope.

On plans for the future for new partners

Stephanie Tully outlined that Qantas Frequent Flyer are always working on bringing new partners to the program, and their objective is to continue to bring in new partners on an ongoing basis. They are actively working on a number of things, including working on larger entities and benefits that are run by Qantas Loyalty under distinct brands – the Epiqure, Qantas Cash and Aquire models. ‘Watch this space’.

On lifetime Gold and lifetime Platinum status levels

They understand that Lifetime Gold status is strived for by members, and isn’t something they are considering at this point changing. Lifetime Platinum was an outright ‘no, we’re not considering it, it would be too expensive’ type argument.

On a sale of Qantas Frequent Flyer

There’s no decision been made to sell down part of Qantas Frequent Flyer. The Qantas strategic review is ongoing though, and no decision has been made around a loyalty program sale at this time. There are no plans for announcements in this area in coming weeks, or potentially even months.

If it were to happen, Qantas would be a majority shareholder, and after all is said and done, there is no intention of changing ‘the value in the program’ to the consumer.

Disclosure: Qantas paid for lunch and offered a thank you gift for everyone’s time.

Qantas Frequent Flyer step up to answer questions about their recent changes, and hint at what’s coming next was last modified: April 21st, 2014 by Keith