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Vanessa Hudson is hoping the revamping of Qantas Loyalty business will be a Goldilocks solution for disenfranchised customers who have been outraged at the price being asked to pay for using its widely available Points Plus Pay scheme and frustrated by the inability to find the cheaper Classic Rewards seats.
The launch of a third scheme, Classic Plus, is Hudson’s bet that giving customers a better deal on points pricing will add some shine to the brand halo that has been so tarnished in the post-COVID restart.
Vanessa Hudson looks to restore fractured relationship with Qantas loyalty members.
Since replacing Alan Joyce in the top job at Qantas, Hudson has taken on the Herculean task of attempting to restore its relationship with customers and staff and reweight the division of the spoils between these groups and shareholders. It is a work in progress, but the overhaul of loyalty is a positive move.
Qantas has been made abundantly aware that the price of loyalty fares has been what it calls a “pain point” for customers.
At its heart, this loyalty strategy is pretty simple – it is effectively discounting points airfares and improving availability by introducing a third loyalty product with 20 million seats on offer.
The Points Plus Pay scheme had enough available seats but at various times had been charging north of 1 million points and up to 2 million points for a seat on some long-haul flights at the pointy end of the plane. And even those rare customers with a lazy couple of million points were loath to use them because they represented such poor value.
The gamble for Hudson is that effectively lowering the price of this product will reduce Qantas Loyalty’s revenue and profit, at least in the short term.
In premium cabins, a Classic Plus redemption is worth 1.5¢ a point compared with the 0.6¢ offered by the Points Plus Pay product.
The new scheme will allow customers to get the same seat for roughly half the number of points. It will be available across all cabins, domestic and international, but it especially hits the sweet spot for international business class passengers – the cohort that was particularly outraged by the price of points using the Points Plus Pay scheme.