Virgin Australia is spinning off its Velocity frequent flyer scheme into a new “stand-alone business unit” headed by a former top-ranking manager of Qantas’ own frequent flyer programme.
The move will see Neil Thompson, who left Qantas as Group General Manager of Loyalty Marketing in 2008 and has since worked at a US-based consultancy specialising in the “optimisation and monetisation of loyalty programs”, appointed as Chief Executive Officer for Velocity Frequent Flyer and reporting directly to Virgin Australia CEO John Borghetti.
Virgin Australia has close to three million Velocity frequent flyers, and Borghetti says the programme – which we voted as 2011's Best Frequent Flyer Programme for Australian Business Travellers – “remains a key growth opportunity for our business.”
“We have done a lot of work over the past 18 months to create a solid foundation for the Frequent Flyer program. The next stage will be to position it as the leading loyalty program in Australia and as a key driver of future earnings.”
Qantas has an estimated 8.5 million members in its own frequent flyer program and seeks to boost this to 10 million over the next financial year.
The Red Roo’s frequent flyer revenue tops $1 billion per year, from which it declared $119 million in earnings in the second half of 2011, so it’s no surprise that Virgin wants to see some similar action from Velocity.