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Virgin names new frequent flyer boss

written by australianaviation.com.au | July 2, 2015
Virgin Australia's Velocity frequent flyer program. (Virgin Australia)
Virgin Australia’s Velocity frequent flyer program. (Virgin Australia)

Virgin Australia has appointed a marketing veteran with three decades’ experience as the new boss of its Velocity frequent flyer program.

The company said on Thursday Karl Schuster will commence as Velocity chief executive on October 1, replacing Neil Thompson.

Schuster will come to Velocity from Aimia Inc, where he has been president for Asia Pacific of the marketing and loyalty analytics business for the past nine years.

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He also previously worked for Carlson Marketing Group in Australia before it was taken over by Aimia in 2009.

Virgin chief executive John Borghetti said Schuster would lead Velocity, which currently had five million members, in its next phase of growth.

“It is a key growth business for the Virgin Australia Group and we are focused on fast-tracking this growth to drive value for members and shareholders,” Borghetti said in a statement.

“Karl’s extensive background in loyalty and marketing, together with his strong leadership experience, will prove invaluable to Velocity and the Virgin Australia Group.”

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Borghetti has previously set a target of seven million Velocity members by 2017.

Meanwhile, Virgin also announced on Thursday it had bulked up Velocity’s data-analytics capabilities with the acquisition of Torque Solutions (Australia) Pty Ltd.

Virgin said Torque, which was founded in 2001, would be integrated into Velocity and support the growth of the airline group’s frequent flyer arm.

“The acquisition also provides another revenue diversification opportunity for Velocity and the Group, as it will enable the business to offer data analytics, campaign automation and consultancy services to third parties,” Borghetti said.

Torque Data chief executive Oliver Rees said: “This is a fantastic opportunity for us to grow Torque Data’s capability to service our existing clients while adding value to Velocity and the Virgin Australia Group.”

The terms of the deal were not disclosed.

The use of so-called big data has become a significant marketing tool for not just airlines but all consumer-focused industries such as banks and telcos, allowing firms to offer more targeted offers or communications with customers and members.

This more personal approach to marketing and communications was discussed during at the 2015 International Air Transport Association annual general meeting in Miami, where airline bosses raised the prospect of customers being offered airfares based on their place of residence and flying patterns rather than demand.

Vueling chief excutive Alex Cruz said it would be inevitable the way airlines price tickets would change as the technology developed.

Meanwhile, Qantas chief executive Alan Joyce said his airline’s 10 million frequent flyer members wanted more individual offers.

“You will identify what a customer wants and deliver the appropriate product and the appropriate price for the customer,” Joyce said during a June 7 panel discussion.

“That is the way things are going longer term and that is what our customers want.”

In February, Qantas announced it had bought a 51 per cent stake in Taylor Fry, a analytics and actuarial consulting firm. And in 2014, the airline group launched a data marketing business Red Planet, which uses data from Qantas’s frequent flyer program to created targeted digital advertising for other businesses.

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