Qantas Frequent Flyer generates more revenue per passenger than any other airline loyalty program, new figures show.
The Qantas program achieved revenue per network passenger of US$37.51 (A$53.94) in calendar 2018, according to a report from IdeaWorksCompany published on July 24. This was well ahead of American Airlines’ AAdvantage scheme, which came in second at US$27.34 (A$39.32).
IdeaWorksCompany noted Qantas at its 2018 results presentation told shareholders it believed 35 per cent of credit card spending in Australia was on Qantas co-branded credit cards.
“That type of number should catch the attention of Australia’s secretary to the treasury,” said IdeasWorkCompany president Jay Sorensen.
“It’s easy to see why these are popular products for airlines operating in countries where consumers eagerly use credit and merchant credit fees are lightly- or un-regulated.”
The IdeaWorksCompany report, sponsored by CarTrawler, said Qantas’s frequent flyer program – which has about 12.3 million members – had total revenue, or billings, of US$1.144 billion (A$1.546 billion) in calendar 2018.
Unites States-based carriers dominated the list. Virgin Australia’s Velocity loyalty program earned US$11.08 (A$15.94) revenue per network passenger to rank ninth.
Figures on ancillary revenue earned by airlines were sourced from disclosures of financial results, reports, investor presentations, financial press releases, and quotes attributed to senior executives, the IdeaWorksCompany report said.
Revenue that qualified for ancillary revenue was described as revenue beyond the sale of tickets generated by direct sales to passengers, or indirectly as a part of the travel experience, including “a la carte” such as bags, travel retail commissions and frequent flyer programs.
Overall, the top 10 earners made a total of US$35.2 billion from ancillary revenue, up from US$2.1 billion in 2007. Frequent flyer programs represented 55 per cent of the total.
In terms of total ancillary revenue per passenger, Qantas came it fifth at US$41.15 (A$59.20), up 160 per cent from US$15.83 it recorded in 2008. Virgin Australia came in eighth in this category at US$34.74 per passenger.
United States-based low-cost carrier (LCC) topped the list at US$50.94 per passenger.
Overall, American Airlines topped ancilliary revenue from all sources at US$7.24 billion with 77 per cent earned from its frequent flyer program and 23 per cent from the other categories.
United States carriers, United, Delta Air Lines and Southwest rounded out the top four overall ancilliary earners followed by Irish LCC, Ryanair, Germany’s Lufthansa Group, Air France/KLM, UK LCC easyJet, Spirit and Air Canada.
“The exponential growth of ancillary revenue among carriers is yet another indication that the airline experience now goes far beyond the flight itself,” CarTrawler chief commercial officer Aileen McCormack said in a statement.
“Mobility is king in the travel marketplace, and airlines need to take advantage of the opportunity they have at the top of the purchasing funnel to maximise revenues from this trillion-dollar marketplace and not get left behind by their competitors.”