Qantas highlights increased engagement as loyalty program returns stronger earnings

Airline releases full-year financial results, noting mixed conditions and lower underlying earnings thanks to high fuel and foreign exchange costs

Qantas has reported a return to double-digital earnings across its frequent flyer program and seen a 24 per cent increase in flight redemptions since announcing a $25 million overhaul of the loyalty offering this year.

The ASX-listed airline reported its full-year financial results today, noting record revenue of $17.9 billion for the year to 30 June 2019, up 4.9 per cent year-on-year. Underlying pre-tax profit, however was down 17 per cent to $1.3 billion, a figure Qantas attributed to a $614 million increase in fuel costs, along with $154 million negative foreign exchange impact, over the year.

A bright spark was the Qantas Loyalty offering, which returned to double-digit earnings growth in the second half, leading to a record underlying EBIT of $374 million off revenue of $1.6 billion. This came off the back of new insurance and financial services streams, as well as improvements made to the Frequent Flyer program.

Total points redeemed during the year grew 12 per cent, while membership increased 5 per cent to 12.9 million. In addition, the Qantas Business Rewards program reached 250,000 members. Qantas also confirmed growth of credit cards earning Qantas points continued to outperform the market, while health insurance customers grew by 46 per cent over the period.

Qantas noted a 24 per cent lift in classic flight redemptions since announcing plans to invest $25 million into renovating its loyalty program from June. Among the changes are 1 million extra rewards seats, a new lifetime qualification and tier points club for non-flying spenders.

Across the respective Qantas divisions, the group confirmed its domestic business delivered an underlying EBIT of $1.03 billion, down 4 per cent year-on-year, while unit revenue from Qantas and Jetstar’s domestic operations grew by a combined 4 per cent. EBIT on international, meanwhile, was down 28 per cent to $285 million.

Qantas Group CEO, Alan Joyce, described FY19 performance as positive given market conditions.

“This result shows the strength of our individual businesses but also the strength of our portfolio as a whole,” he said. “Even with headwinds like fuel costs and foreign exchange, we remain one of the best-performing airline groups in the world. Our performance is the result of having the right strategy and the ability to deliver it.”

Looking ahead, Joyce said overall market conditions remained mixed, with weakness in the lower-end leisure market, and flat overall demand across corporate customers.

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.  

 

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

Well done, team at Larsen. Fantastic story of how to continually invest in customer experience.

Adam Frank

A designer jewellery brand's take on customer relations

Read more

Great piece Katja. It will be fascinating to see how the shift in people's perception of value will affect design, products and services ...

Paul Scott

How to design for a speculative future - Customer Design - CMO Australia

Read more

Google collects as much data as it can about you. It would be foolish to believe Google cares about your privacy. I did cut off Google fr...

Phil Davis

ACCC launches fresh legal challenge against Google's consumer data practices for advertising

Read more

“This new logo has been noticed and it replaces a logo no one really knew existed so I’d say it’s abided by the ‘rule’ of brand equity - ...

Lawrence

Brand Australia misses the mark

Read more

IMHO a logo that needs to be explained really doesn't achieve it's purpose.I admit coming to the debate a little late, but has anyone els...

JV_at_lAttitude_in_Cairns

Brand Australia misses the mark

Read more

Blog Posts

Why marketing technology utilisation is taking on new urgency

Disparate data sources, fragmented technology and a lack of funding has left many brands struggling in the battle for online customer attention amid a global pandemic. Now more than ever, brands need to focus on unlocking the value of their marketing technology.

Suzanne Croxford

Marketing technology partner, Wunderman Thompson Australia

How to design for a speculative future

For a while now, I have been following a fabulous design strategy and research colleague, Tatiana Toutikian, a speculative designer. This is someone specialising in calling out near future phenomena, what the various aspects of our future will be, and how the design we create will support it.

Katja Forbes

Managing director of Designit, Australia and New Zealand

The obvious reason Covidsafe failed to get majority takeup

Online identity is a hot topic as more consumers are waking up to how their data is being used. So what does the marketing industry need to do to avoid a complete loss of public trust, in instances such as the COVID-19 tracing app?

Dan Richardson

Head of data, Verizon Media

Sign in