Qantas shares surged to an all-time high on Thursday, following the airline’s announcement of a major overhaul to its frequent flyer programme. The changes, aimed at attracting more cost-conscious travelers and restoring the airline’s reputation after a series of controversies, saw Qantas’ stock rise 0.5% to close at A$9.42, after briefly hitting a record A$9.54 during the day.
The frequent flyer programme revamp, set to roll out over the next 12 months, is part of Qantas’ broader strategy to strengthen customer loyalty and boost revenue. The overhaul builds on last year’s update, which saw the airline introduce 20 million additional reward seats for purchase with points.
This move follows a tumultuous period for Qantas, including incidents like the sale of tickets for already cancelled flights, which tarnished its public image. By expanding the rewards programme, Qantas hopes to recover some of the lost trust and drive long-term growth.
Qantas Loyalty, the company’s rewards division, generated approximately A$2.5 billion ($1.57 billion) in revenue for fiscal 2024, contributing around 11% of the airline’s total earnings. As of June 2024, the programme boasted 16.4 million members.
The revamped programme will offer members more access to premium cabin reward seats, greater opportunities to earn points when flying, and access to more partner airlines. Additionally, Qantas will offer the lowest economy reward seat fares in Australia, further enhancing the appeal of the programme.
Market strategist Jessica Amir, from trading platform moomoo, noted that the increase in travel during this time of year, fueled by the summer holiday season in Australia, could be contributing to the surge in Qantas shares. “We see peak travel and consumer discretion around this time, with Australians still on holiday until after Australia Day,” she explained.
Amir also pointed out that the return of Chinese nationals to their home country is contributing to the rising demand for travel, which is expected to further benefit Qantas in the near term.
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