Question 1

Is there any remaining growth potential in the Australian loyalty market?

Accepted Answer

The market is nearing total saturation, with an average of one frequent flyer membership for every Australian over the age of 15. Consequently, growth is decelerating, with the market leader's membership expansion slowing to 5% per annum over the last three years.

Question 2

How aggressive is the competition between the two major players?

Accepted Answer

Competition has intensified since late 2014, resulting in a significant divergence in growth trajectories. While Qantas maintains a larger base of 11.8 million members, Virgin Velocity has achieved a 22% annual growth rate to reach 8.0 million members following external capital infusion.

Question 3

How much influence do these programs have over consumer spending?

Accepted Answer

These programs are central to the Australian financial ecosystem, with 35% of all credit card spend currently earning Qantas Frequent Flyer points. Operators are now forced to revisit value propositions as regulatory changes to interchange fees threaten this primary revenue stream.

Question 4

What is the strategic priority for incumbents now that the market is full?

Accepted Answer

With the 19.8 million combined members representing a nearly exhausted domestic pool, the focus has shifted to increasing average revenue per member. Existing players are evaluating partial program sales and the deployment of blockchain and big data analytics to unlock new monetization channels.

Australian airline loyalty programs - reaching new heights

Abstract

Key Takeaways

Frequently Asked Questions

Abstract

Key Takeaways

Frequently Asked Questions

Unlock the full report

Free

Lite

Team