Qantas Loyalty digital initiatives

Qantas Loyalty will be rolling out several digital business initiatives next year, chief executive Lesley Grant says.

Qantas Loyalty chief executive Lesley Grant. Picture: Sam Mooy

Qantas Loyalty will be rolling out several new digital business initiatives next year, according to chief executive Lesley Grant.

This follows the launch of the successful Qantas Cash program and its recent Qantas Assure Health Insurance program.

Ms Grant, who took over what was then called Qantas Frequent Flyer in July 2012, has been steadily expanding the core operation, which now has more than 11 million frequent-flyer members, by moving into “adjacent” busi­nesses.

“We are growing through innovation,” Ms Grant said in an interview for The Australian’s The Deal magazine.

“We have a lot of ideas in the pipeline. Qantas Assure was one of those innovations. We are working on something new right now which we look forward to launching in the near future.

“We have identified a number of markets that we believe we could compete in, with our assets and capabilities.

“We will have a lot of new initiatives coming on to the market in the new year. They are digital ventures and they have quite disruptive business models.”

Read The Deal magazine, out today in The Australian.

Ms Grant said any expansion of businesses under the Qantas Loyalty umbrella would be aimed at leveraging the Qantas brand in areas that could appeal to its customer base.

When she took over as chief executive, more than four years ago, Qantas Frequent Flyer had fewer than eight million members and the airline was considering whether to sell or reduce its stake in the business.

“Qantas Loyalty was one of the many assets that were under review when we were developing the transformation plan for the business,” she said.

“But the decision was taken at board and CEO level to proceed with a partial sell-down. Now the loyalty business, which has as its core the frequent flyer program, is integral to the business.

“We have assets which serve the whole group and there are certainly no plans to reconsider a sale or a partial sale of the loyalty business.”

Ms Grant said the Qantas frequent flyer program was now “like the glue across the airline”.

Under Ms Grant, the loyalty business has significantly expanded its role and focused more on providing data analytics on customers to both Qantas and its low-cost airline Jetstar.

In February last year, the business bought a 51 per cent stake in analytics and actuarial firm, Taylor Fry, which has operations in Australia and New Zealand.

It has since joined with other companies including Westpac and National Australia Bank as investors in the secure data exchange business, Data Republic.

“Our data analytics operations support the group with lots of analysis for the group strategy team,” she said.

“We provide customer segmentation models for the Qantas group and we can inform, with our insights, the product development of both Qantas and Jetstar on their different routes.

“We play an important role in pushing key customer information to our front line teams.”

Ms Grant said there had been a strong take-up of Qantas’s new deal with the Airbnb online accommodation service since it was launched last month.

Under the arrangement, people who book Airbnb by going in through the Qantas website can earn Qantas points.

Ms Grant said most Qantas customers taking up the offer were people planning to go on holidays looking to book accommodation overseas.

She said any new business ventures launched by Qantas Loyalty would be digital and designed to take advantage of the increasing use of mobiles by Qantas customers to do business.

“Everyone is mobile-enabled these days,” she said.

“For us, having in the hands of our member base all these ways they can connect and earn points and redeem points is a high priority for us.”

Ms Grant said Qantas Loyalty now had “the world’s most diverse airline loyalty program”.

The Qantas Loyalty business has provided a steadily increasing source of profits for the business in recent years, providing a buffer against the more volatile core airline businesses.

Its revenue rose by 6.7 per cent to $1.45 billion in the year to June while its underlying earnings before interest and tax rose by 9.8 per cent to $346 million.