March is proving a difficult month for airlines. With continuing trouble in the Middle East, crucial hubs for refuelling and ongoing flights have been lost. It has meant rerouting to avoid Iran and other dangerous territories, squashing flight paths. It has caused the cancellation of thousands of flights and it has created much passenger uncertainty.
During difficult times, the airline loyalty business model continues to be a major buffer for airlines. Just like during Covid, when air travel virtually stopped, airline loyalty programs propped up businesses, proving to be collateral for loans and a strong connector for business partners, especially financial services.
The numbers speak for themselves.
Consider Qantas: Qantas Loyalty delivers $286m EBIT as membership reaches 18.3 million
Qantas Loyalty is delivering $286m EBIT (+12%) on $1.4bn revenue in H1 FY26 against group revenue of $12.9bn (+6.3%). Frequent Flyer membership rose 7% to 18.3 million and points earned increased 10% to 120 billion.
Qantas issued more than 125,000 new points-earning consumer cards in the half and maintained its 35% market share. Points transferred from bank proprietary programs rose 25% year-on-year.
Qantas Business Rewards grew 10% to 665,000 members (+10%) with points earned through payment partners up 50%.
While Qantas has cut 130 roles from its 600-person Loyalty division, this is seen as streamlining, although the fact that in January Qantas Frequent Flyer lowered points value for the third time since April 2024 is bound to go down badly with customers.
Qantas Loyalty is targeting EBIT of $1 billion by 2030 which is double last year’s $556 million.
Qantas Reward seat bookings rose 15% and upgrades 10% last year. Membership is now 18 million.
On the negative side, ACCC has issued an alert over Qantas impersonation scams targeting frequent flyers with fake messages about refunds, gifts and expiring points.
Qantas has confirmed agreeing to settle a class action regarding flight credits during Covid brought against the airline in August 2023. The airline has agreed to pay A$105 million (£55 million), with no admission of liability under the terms of the settlement.