Qantas Buy-Back & Loyalty Revamp
Major Qantas shareholder criticizes market confusion over deferred share buy-back amid loyalty program changes, affecting margins.
March 10, 2024
Qantas Shareholder Concerns and Loyalty Program Changes
A significant shareholder of Qantas has expressed concerns that the airline has confused the market by announcing a share buy-back while simultaneously deferring the action until after updates to its loyalty program. This pending decision appears to leave investors uncertain about the immediate future of their shares.
Loyalty Program Updates and Impact on Margins
Qantas is set to revise its loyalty program to allow easier booking of seats using points, a move that has raised worries among brokers. These financial experts are concerned that while this strategy could enhance customer loyalty and satisfaction, it may also negatively impact the airline's overall profit margins. However, some brokers see a potential margin opportunity for Qantas if the loyalty division can pass some of its profit back to the airline. Currently, Qantas Loyalty purchases seats from the airline at cost, not contributing to the airline's profit margins.
