Virgin Blue Warns Consumers Against Qantas' Coercive Frequent Flyer Strategy

Strategic Insights -

Virgin Blue, the low-cost carrier, has launched a campaign warning consumers not to be "tricked" by Qantas' plans to lock its frequent flyer customers into a specific credit card. The advertisement, titled "Refuse if you want to Choose", claims that Qantas' move is a form of "trickery" that denies consumers the freedom to choose their loyalty program. Virgin Blue chief executive Brett Godfrey stated that reward programs should be transparent, competitive, and earn the choice of consumers, not force people into choosing them.

Key Takeaways:

  • Virgin Blue launched an advertising campaign warning consumers not to be "duped" by Qantas' plans to lock its frequent flyer customers into a specific credit card.
  • Qantas plans to "force" millions of credit card holders to lock in the Qantas frequent flyer option on their credit card's loyalty program, which will deny them the option to transfer points to other programs.
  • Consumers need to make a decision about their credit card by March 31 to continue earning Qantas frequent flyer points, with many reward cards no longer offering points by next month.
  • Qantas customers will need to opt in for a "direct earn" credit card that exclusively transfers their points to Qantas or otherwise stay with their current cards but lose the option of transferring their points.
  • Virgin Blue chief executive Brett Godfrey emphasized that consumers should not be coerced into locking in to one program and should have the freedom to choose their loyalty program.
  • Qantas executive general manager of group loyalty programs, Simon Hickey, stated that Qantas' campaign is "all about giving members direct access to Australia's most popular loyalty program".

Statistics:

  • Millions of credit card holders will be "forced" to lock in the Qantas frequent flyer option on their credit card's loyalty program.
  • Consumers who do not opt in for a "direct earn" credit card will no longer be able to transfer points to Qantas.
  • Many reward cards will no longer offer Qantas frequent flyer points by next month.
  • Qantas customers need to make a decision about their credit card by March 31 to continue earning points.

Sources:

  • Asia Pulse, March 24: "Virgin Blue Warns Consumers on Qantas Frequent Flyer Plan"
  • AAP, 24-03: "Virgin Blue Warns on Qantas Frequent Flyer 'Duping'"