Qantas jumps back into loyalty bed with Woolworths

Nicola Riches
By Nicola Riches | 15 December 2015

Qantas and Woolworths have performed a U-turn this morning revealing that they will not 'de-couple' their loyalty platforms, while the airline swaggers with a strong trading update, teasing investors with strong profit predictions. 

Qantas' latest trading update, ahead of February’s half-year earnings, shows it jetting towards solid profit.

The airline issued a statement to the ASX this morning saying it expects profits before tax to fall in the $875m-$925m range, attributable to its ‘transformation program’, increased revenues and lower fuel prices.

CEO Alan Joyce noted the group expects a good half-year result from its loyalty platform that today has been formally reintegrated with Woolworths’ following a consumer backlash.

The volte-face follows Woolworths' move in October to ditch the air mile points, which were apparently costing the retailer between $60-$80 million a year, in favour of in-store discounts.

The move sparked a massive consumer backlash with customers taking to social media to vent their anger and frustration.

Woolworths said that roughly half of all Everyday Rewards members were linked to the Qantas Frequent Flyer Program and of those around 32% had not redeemed points for flights or other goods during the life of the program.

Woolworths Rewards and Qantas Frequent Flyer members will, from next year, be able to convert Woolworths Dollars into Qantas Points, continuing the six year association the two parties for at least another three years.

The new agreement will give customers the choice to convert their Woolworths Dollars, earned through buying orange ticket products, into Qantas Points at a conversion rate of 870 Qantas Points for every 10 Woolworths Dollars.

Woolworths’ food group managing director, Brad Banducci, said: “Our revamped Woolworths Rewards program is delivering for our customers. We are seeing encouraging results, with strong member growth and increased scan rates at the checkout."

Email Nicola at nicolariches@yaffa.com.au.

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