Frequent flyer: what changed for the Qantas (ASX:QAN) share price today?

Qantas wants their members to treat themselves with a more attractive loyalty proposition…

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Key points

  • The Qantas share price glided 4.85% higher today amid changes to its loyalty program
  • Frequent flyers will require between 30% to 45% fewer points depending on the redemption
  • Qantas is rolling the changes out to its 13 million members, anticipating a pickup in domestic leisure travel

The Qantas Airways Ltd (ASX: QAN) share price took flight on Friday after announcing radical changes to its frequent flyer program.

At the final bell, shares in Australia's iconic airline were up 4.85% to $5.19. As a result, the airline operator is now in the green on a year-to-date basis.

All in all, it seems investors are optimistic about the modifications made to frequent flyers. Although, the important questions are: what are the changes, and what does it mean for Qantas?

Qantas lowers the bar for its frequent flyers

On Friday, investors pushed the Qantas share price up on news it will cut the number of frequent flyer points needed when booking hotels or holiday packages.

The move will see the Aussie airline reduce the number of points required by 30% and 45% respectively. While the decision might seem counterintuitive for a company attempting to increase profits as it rides out of the COVID-19 storm, the airline sees it differently.

According to the release, the program's 13 million participants will be able to enjoy this generosity permanently, with the changes intended to remain in place.

In addition, the company is instating a temporary reduction for flight redemptions. In turn, travelers will need 20% fewer points when using a combination of cash and points on flights. However, this will only be in place between April 2022 and April 2023.

Commenting on the changes, Qantas loyalty chief executive Olivia Wirth said:

If you look at domestic trends, people are looking for weekends away up the coast or something similar and that might not include a flight – this provides the chance for our customers to use points on those trips.

Travel trends are changing in the market and, from a timing perspective, we think there will be a leisure travel boom soon.

Furthermore, the announcement comes two weeks after the Qantas share price weakened on the delayed reopening of the Western Australia border.

Qantas share price snapshot

The ASX-listed Qantas share price has been flying through turbulent patches during the pandemic. Despite the challenges, the airline has managed to land itself a positive return for shareholders in the past 12-months. In fact, the Aussie airline has outperformed the broader market during this period.

For reference, the S&P/ASX 200 Index (ASX: XJO) has returned a total of 4.1% in the last year. Meanwhile, the Qantas share price is up 9.5%.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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