APEX Insight: By recognizing Qantas’ brand loyalty and connecting frequent flyers with services and products relevant to their lifestyle – even during troubled times – Qantas reinforces its relevance and profits on consumer confidence in the brand.
During his keynote address at the CAPA World Aviation Summit in Helsinki, Qantas CEO, Alan Joyce, shared secrets of the airline’s profitable turnaround and highlighted the significant payoff of capitalizing on its brand strength and connection to customers.
Joyce suggested that other industry leaders could achieve similar results by valuing strong brand definition and embracing the opportunities of digital platforms and Big Data.
“We have 11 million frequent flyers. We have a huge amount of data that we’ve been collecting for over 20 years. We think that information is unique. We also think our brand is unique,” he said at the annual conference held last month.
Qantas’ relationship with frequent flyers allows the airline to gather lifestyle preference data. Frequent flyers also have positive associations with the brand, which creates an opportunity to drive sales of related lifestyle products and services.
“Airlines are some of the most trusted brands in the world. Qantas is also an iconic Australian brand. People trust us; with us flying them, with serving them food every day and have done for a long time. That trust is an area that you can extend into adjacent businesses, which we are doing with our loyalty program,” Joyce said.
“We’ve launched financial services and a media analytical business and it’s turning out to be four times more effective than traditional advertising campaigns.” – Alan Joyce, Qantas CEO
Qantas has clearly aligned its brand with modern luxury in its lounges, cabins and other customer-facing spaces, working with Australian designer Marc Newson. Qantas also featured Newson’s distinctive design language in tableware sold through its online shop. Australian fashion designer, Martin Grant, created the airline’s new uniforms and helped the airline tell 95 years of brand history with Barbie and Ken, as part of a recent campaign.
The airline also brought on board Australian-born supermodel Jessica Hart as an exclusive trend consultant. With Hart and Australian scarf brand, Bird & Knoll, the airline produced limited-edition scarves, sold to frequent flyers.
“We have been launching adjacent engagement businesses: like the Qantas Golf Club, and epiQure, which is a wine club, but we’ve also been launching new digital businesses,” Joyce said. “In the last year, we’ve launched financial services and a media analytical business, which places ads using the information we have about customers, and it’s turning out to be four times more effective than traditional advertising campaigns, and it’s making money from day one.”
Joyce characterized its frequent flyer business as a stable source of revenue, “Not volatile like the aviation income, and that’s left our group, now with JetStar, and with our loyalty program, having over 50 percent of EBIT earnings coming from non-traditional legacy carriers, with the growth opportunities that entails.”
To capitalize on these opportunities, Joyce feels, airlines must be open to innovation. “The big area, that we think is the opportunity for those in the aviation industry, is… being disruptive in the digital space,” he said.
Joyce added, “I think the opportunities that we have now are phenomenal. The brands that we have now are phenomenally respected and trusted brands. Tapping into the opportunities with the growth and the demographic change in Asia, tapping into the opportunities of Big Data – are the future.”