The airline is relying on innovation and strategic partnerships to help meet its ambitious earnings forecast of $800 million to $1 billion. This comes amid a possible regulatory overhaul from the RBA. Credit card rewards have long been a strong revenue stream for airlines. However, changes to payment rules could affect how consumers earn and redeem frequent flyer points.
The RBA is currently reviewing interchange fees and surcharging rules. This might lead banks to reduce rewards on credit cards, which would impact loyalty programs tied to airlines. A substantial portion of revenue in Qantas Loyalty comes from banks that purchase points to include with their card offerings. In light of the possible changes, Qantas is working with banking partners to maintain the value of its rewards program and avoid compromising its loyalty strategy.
Last year, Qantas Loyalty reported $563 million in earnings from $2.5 billion in revenue. Customers earned 200 billion points with 171 billion points redeemed. Around 35% of all credit card spending in Australia is linked to Qantas points, underlining the program’s central role. Still, investor confidence has declined, with Qantas shares down by 10% since August due to uncertainty surrounding the RBA’s final ruling, expected by the end of the year.
To counter the impact of the potential reforms, Qantas is investing in new loyalty offerings. These include “status on the ground”, a system that rewards members who spend but do not fly often. The airline is also enhancing its Classic Plus rewards, which give customers wider access to premium seats and address previous shortcomings. These updates point to a shift from a points-driven programme to a more balanced rewards model.
Looking ahead, Qantas is positioning its frequent flyer program and initiatives like Project Sunrise as key elements of future growth. While new regulations present a challenge, the airline appears ready to respond by using innovation and its long-standing ties with financial institutions. The reaction of consumers and the broader financial landscape will reveal how effective this strategy is.
