Virgin Australia is undertaking a global talent search after the recent resignation of its long-time Velocity Frequent Flyer CEO, Karl Schuster, who left the business last week.
Having led Velocity for the past half-decade, Schuster oversaw significant growth of Virgin Australia’s frequent flyer programme; which almost doubled in size from 5.3 million members to over 10 million members during Schuster’s tenure.
Such growth led to the programme increasing annual revenue to over $441 million, making it one of Australia’s most successful loyalty programmes and a significant contributor to Virgin Australia’s bottom line.
Throughout Schuster’s time at the helm of Velocity Frequent Flyer, the programme added a number of strategic non-aviation earning partners that assisted in boosting awareness of the programme and driving membership.
The addition of Optus, Westpac and Freedom Furniture have assisted in broadening Velocity’s point-earning potential, while in October 2016 Velocity joined forces with the 1994-launched Flybuys, giving Virgin Australia’s frequent flyers the ability to effectively earn points at Coles, Target, Kmart and a host of other retailers, through a points transfer option.
In 2015, Velocity’s visibility increased greatly when BP became a points-earning partner. The move saw Velocity branding displayed at over 1,400 Australian BP stores – both internally and externally.
This agreement was bolstered the following year when, in an Australian first, frequent flyer points could be redeemed to make purchases at BP’s stores.
However, Virgin Australia’s relationship with the petrol giant soured in 2017, when it was revealed that BP intended to acquire Woolworths’ petrol business, which held an existing relationship with airline rival Qantas. While the Velocity – BP partnership was ultimately retained; it recently came to an end on 31 January 2020.
In 2019, Virgin Australia signalled its intention to buy back a 35% stake in the programme, held by Affinity Equity Partners. The deal – reported to be worth $700 million – gives Virgin Australia full control of one of Australia’s top four rewards programmes.
There is no question that Velocity has come a long way under Schuster’s stewardship, with the departing CEO commenting: “It has been an honour to lead the Velocity team since 2015 and I am incredibly proud of everything the team has achieved during this time.”
“This wasn’t an easy decision to make, however the business is now in a place where I feel the time is right for me to step down as CEO. With Velocity once again back in the Virgin Australia Group this will only continue to help deliver results for the Group.”
Virgin Australia Group CEO Paul Scurrah thanked Mr Schuster for his dedication and unwavering commitment to Velocity, adding: “Velocity plays a very important role in the Group’s future and Karl has helped set up the program for success in its next phase. I would like to thank Karl for his contribution to Velocity and the Group during his time here and would like to wish him all the very best for his future.”
Virgin Australia says former Velocity CEO Neil Thompson – who led the programme from 2012 to 2015 – will take the reins of the frequent flyer business in an interim capacity.
Adding to his past tenure at Virgin Australia, Thompson brings experience as Group General Manager, Customer Relationship Marketing at Qantas (2006-2008) as well as serving on various boards including Non-Executive Director of Horizon Power and Plan International.