Qantas has opted to hang onto its lucrative frequent flyer scheme as it attempts to ride out its current financial woes, which were today revealed to be a record $2.83 billion dollar loss.
"After careful consideration our judgement was that Qantas Loyalty continued to offer major profitable growth opportunities, and there was insufficient justification for a partial sale" Qantas CEO Alan Joyce said.
Analysts have valued the Qantas Loyalty division as high as $3 billion – significantly greater than the airline itself.
However, it was argued that selling the business would be a quick-fix solution to bolster the balance sheet in the short term but at the cost of undermining the airline as a whole over the longer term.
Qantas Loyalty remains a solitary bright spot on the airline's spreadsheet, recording double-digit growth over the past five years and funnelling revenue back into the Flying Kangaroo's pouch.
In the 2013-2014 financial year Qantas Loyalty's pre-tax earnings stood at $286 million, an increase of 10% over the previous year.
The Qantas Frequent Flyer program now boasts over 10 million members and has arguably positioned Qantas Points as Australia's de facto second currency.
Earlier this month Qantas opened a new online shopping mall with 16 new retail partners including Apple, eBay, David Jones, The Iconic, Macy’s and Neiman Marcus.
The mall is part of a new QantasPoints.com hub intended to further push the airline's frequent flyer scheme as a mainstream loyalty program with new 'earn and burn' opportunities beyond flying.
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About David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.