Qantas' Loyalty business was its profit puppy pre-COVID. And now it's back.
Background: Qantas' Loyalty biz - aka the home of Frequent Flyer points - was its profit puppy pre-COVID. And we all know how it works - earn points, and redeem them back on flights, flight upgrades or at Qantas' online store.
What happened: And every second person does it. Literally. There are 13.6 million loyalty members, and over 600 business partners. Which is why it's such a goldmine. Ya could say Qantas' Loyalty division has been like the Kim Kardashian of the Kardashian clan.
What else: It raked in $376 million in 2019, which was more than the airline's entire international arm, and almost as much as Jetstar. And while COVID took 30% off its bottom line, Qantas has lined up more biz partners and new products which should put it back on track to deliver earnings of around $600million in the 2024 financial year.
Distribution channels are the intermediaries between consumers and a product or service. Facebook is a distribution channel, because it sits between the business and the consumer. And a retailer could be a distribution channel, because it sits between a manufacturer and a buyer.
Previously, it used its airline business to acquire new Qantas Loyalty members. More flyers = more Frequent Flyers. But with 60% of Aussies over 16 already members, it needed a new growth strategy. So it's focusing on building its own distribution channels.
Step one: find new partners (aka businesses) to sell points to. And step two: develop more Qantas-branded products (business class PJs, anyone?) and services. This creates a lush, thriving Qantas ecosystem that people never want to leave.
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