Qatar Airways Privilege Club Has So Much Potential

Filed Under: Qatar

I’ve been following travel loyalty programs for about 15 years. I have to say that I don’t think there’s a loyalty program out there with more untapped potential than Qatar Airways Privilege Club.

Qatar Airways: great airline, subpar frequent flyer program

Qatar Airways is recognized by many as being one of the all-around best airlines in the world. The airline operates an incredible global route network, and has an excellent onboard product, including its Qsuites business class.

Qatar Airways’ incredible Qsuites business class

The thing about Qatar Airways is that it can be a pleasure to fly with the airline, but its frequent flyer program is simply not compelling… at all. It seems like the airline approaches its frequent flyer program as a cost center rather than a profit center, which is extremely common among non-US airlines. That’s a huge missed opportunity, in my opinion.

The airline belonging to oneworld is even more of a double-edged sword, since it creates very little incentive to be loyal to Qatar Airways.

Qatar Airways could (and should) use its oneworld membership as a competitive advantage for its frequent flyer program, but instead people are largely earning and redeeming miles through partner frequent flyer programs, since they’re more compelling.

Qatar Airways isn’t leveraging its oneworld membership as much as it could

I had a Privilege Club dream

Qatar Airways has recently made some positive changes to its Privilege Club program, which bring the program from awful to average, I’d say. I’ve been thinking a lot about Privilege Club lately (yes, I also think about loyalty programs in my free time), and I guess that caused me to have a dream about Privilege Club the other night.

In my sleep I created an all new frequent flyer program for Qatar Airways, and it was awesome (in my humble opinion). šŸ˜‰ I then started Googling to see who the current head of Privilege Club program is. I’m not sure why, exactly, because I’m not one to send emails out of the blue. Then I noticed that the airline is actually hiring a new VP of Loyalty.

Now, to be clear, this isn’t my attempt to apply for a job with the airline:

  • I love what I do, and have no interest in working for a big corporation
  • I’ve intentionally turned down several (paid) opportunities for travel loyalty related consulting, since I do what I can to remain as independent and unbiased as possible
  • Beyond that, I probably wouldn’t get the job, because I’m not “traditionally” qualified

All that being said, loyalty programs are my passion, and I’d like to think I have a decent understanding of the consumer psychology side of loyalty, as well as the economics of loyalty programs. If Qatar Airways’ new head of loyalty (or anyone else at the airline) wants to talk, I’d be happy to do so and provide some feedback.

But hey, maybe I’m totally off base. Qatar Airways’ last head of loyalty made great changes to the program like… introducing a heavy Platinum card, because apparently that’s the feedback they had been getting from members as to what they wanted.

What changes would I make to Privilege Club?

I’m going to try to keep this relatively brief. Let me first share the areas of Privilege Club that I view as being opportunities, and then I’ll share some big picture changes I’d make to the program.

To be clear, I’m approaching this from the perspective of how Privilege Club could become more profitable in a win-win way. It’s about strategies that will engage program members and make them choose both Qatar Airways and Privilege Club over competitors.

The fundamental problems with Privilege Club

Privilege Club doesn’t seem like a program that’s trying to be a profitable entity in and of itself, and I’m also not sure it’s actually furthering Qatar Airways’ goals. The way I view it, some of the weaknesses of the program are as follows:

  • Privilege Club does nothing to incentivize people to actually visit Doha
  • Qatar Airways’ membership in oneworld is a huge competitive advantage over Gulf rivals (which aren’t in global alliances), but oneworld partner redemptions are borderline useless — redemption rates are extremely high, there are fuel surcharges, no stopovers are allowed, and you can’t even book online, but rather you have to fill out a form and they’ll contact you
  • While Privilege Club has decent redemption rates for travel on Qatar Airways, they’re not quite as good as the rates through some partners, like American AAdvantage, so there’s no incentive to credit to Privilege Club
  • There aren’t many ways to earn Privilege Club miles — the program partners with Citi ThankYou, but doesn’t have US co-branded credit cards, doesn’t have more transfer partners, and doesn’t often sell miles at an attractive rate
  • Actual elite perks are fairly weak, and don’t create much of an incentive to choose Qatar Airways over another Gulf carrier, especially when you consider that many people will just fly whichever Gulf carrier has the best schedule and/or is cheapest in a particular cabin

Qatar Airways doesn’t do a great job encouraging people to visit Doha

How I would fix these Privilege Club problems

How do you turn Privilege Club from a cost center to a profit center? Here are some of the significant changes I would make (and I have a lot of other ideas):

  • Allow stopovers in Doha even on one-way Privilege Club awards, since getting people to visit the country is one of the goals of the airline (at least once things normalize, since Qatar’s borders are currently closed); take it a step further even, and give Privilege Club members some number of bonus miles when they actually visit Doha for more than a layover for the first time, whether on a paid or award ticket
  • Completely overhaul oneworld award redemptions, as this could be an incredible profit center for the airline (just look at what programs like Avianca LifeMiles and Alaska Mileage Plan do for partner redemptions); allow easy online bookings, eliminate fuel surcharges, and allow stopovers even on one-way awards at no cost (this costs the airline nothing extra, and creates an incentive to book through Privilege Club rather than a competitor)
  • This won’t be popular, but if I ran the program I would partly restrict Qatar Airways premium cabin award space to the Privilege Club program, all while having reasonable redemption rates; this gives people an incentive to be engaged in Privilege Club, rather than choosing to go through another program instead
  • Make Privilege Club miles easy to earn, including by partnering with more transferable points currencies
  • Develop a co-brand credit card in the US that offers a significant incentive to spend, including the ability to earn status and discounted award flights for passing certain thresholds (having more elite members doesn’t cost the airline much, since perks are mostly related to an improved travel experience, which has very little marginal cost)

Those are just a few basic ideas, and if done correctly, these changes could greatly improve Qatar Airways’ level of engagement and revenue through its loyalty program.

There’s so much potential with Qatar Airways’ oneworld membership

Bottom line

Qatar Airways is a great airline to fly, but its loyalty program isn’t compelling. As far as I’m concerned, there’s not another airline loyalty program in the world with as much potential as Privilege Club.

There’s no reason Qatar Airways’ loyalty program couldn’t be turned into a massive, multi-billion dollar profit center that not only makes money directly, but encourages people to fly Qatar Airways in a profitable way.

Qatar Airways’ last two heads of loyalty talked a good talk, but didn’t actually do much to positively change the program. To be clear, it’s entirely possible (and even likely) that their hands were tied and decisions were made from above, so this is by no means intended as an attack on them.

I also feel like some things at Qatar Airways are moving in the right direction since Thierry Antinori became the Chief Strategy and Information Officer at Qatar Airways. Maybe there are more good things to come?

Am I the only one who sees so much potential for Privilege Club?

Comments
  1. You hit it square on the head! When it comes to loyalty programs, you can very much influence consumer behavior. I was fan of QR long before the hype and prefer the airline if I need to fly. But tbh, I don’t even know what their award chart looks like because I viewed it and brushed it off. It was so bad that I haven’t viewed it in years!

    But look at credit cards and what they’ve done during the pandemic….show me 10x at Amazon and your card jumps to the top of my wallet and I can’t buy fast enough.

    Your points in this article are a solid foundation and would do so much for the program.

  2. Qatar has some financial partners. E.g., you can transfer membership rewards from German Amex cards to Privilege Club.

  3. @ John — Indeed, though generally speaking co-brand agreements are significantly more lucrative and robust in the US than elsewhere, given interchange fees, the size of the market, etc.

  4. I actually don’t agree with the idea that Privilege Club has gone from “awful to average”

    It was awful until a few weeks/months ago (when they changed redemption rates) but now I’d say it’s actually very good. 70k in business US-Doha with $7 in tax is unbeatable, and there are very good redemption rates to other places as well
    Sure, stopovers aren’t allowed, but TBH that’s now more the norm than the exception. Most mainstream FF programs don’t allow stopovers on one-ways as well as RTs.
    Finally, while AA redemption rates may be marginally better, we are really talking about marginal benefit here. And I think QR is right to make there’s more expensive, because QR is a much better airline than AA and not having to deal with AA Advantage is a plus in and of itself. Also, with QR status you get lounge access domestically, which can’t be said for AA

    It might not be a perfect program but I’d say it’s actually quite good

    Also you have a “Don’t get me wrong” in the article that isn’t a full sentence…

  5. I agree these are great ideas but I’m not sure if QR needs a better loyalty program when its hard and soft product are already top notch. It reminds me of Delta and its loyalty program skymiles. If Delta is viewed as a really great airline in the US, then it doesn’t have much incentive to make its loyalty program better since people are already buying Delta tickets over its competition.

  6. Now that Qatar is charging extra for lounge access and picking your seat in advance, I donā€™t think theyā€™ll be getting much premium business anyways. They are banking on rich, important business people to pay for the perks and I donā€™t think those type of people care much for this

  7. @ Mayank — I highly doubt that Qatar Airways executives are suddenly banking on “rich, important business people” paying more for flights. The airline has big premium cabins, and would this really be the time to make a change like that, when business travel is at all time low?

    I think the unbundled business class concept is simply poorly thought out, unless another shoe is about to drop, in the form of these “basic” business class fares actually being cheaper.

    I’d also argue that even people booking full fare business class largely care about loyalty programs. Often business travelers on the highest fares aren’t necessarily that rich, they just have jobs that require a lot of travel, and they make the most of it.

  8. @ Joey — All fair, though to be clear, my suggestion isn’t based around any “need” for a better loyalty program to fill seats. Using the SkyMiles example, the program is worth billions and billions of dollars, despite the not-amazing value proposition for those looking to maximize. Arguably at US airlines the loyalty programs are worth more than the airlines as such otherwise.

    Look at Qatar Airways’ financial filings, and you’ll see very little on Privilege Club, or revenue attributed to it.
    Qatar Airways has lost billions of dollars in recent years due to a variety of factors, so I’d imagine the airline would love for Privilege Club to become more of a profit center.

  9. @ Matt — Interesting take. A few thoughts:
    a) Generally speaking redemption rates are still lower through AAdvantage, especially if connecting beyond Doha
    b) The reason I’m suggesting the airline should allow stopovers is because it could be a competitive advantage, not because it’s the industry norm
    c) If people are going to redeem for travel on Qatar Airways, surely the airline would prefer people book through Privilege Club, where margins are higher for Qatar Airways, and where members are more engaged; but currently no such incentive exists
    d) The bigger issue is that even if the value proposition of Privilege Club is decent, the miles are hard to come by; it’s much easier for people to buy AAdvantage miles and redeem on Qatar Airways than to book through Privilege Club directly
    e) Regarding the benefit of not having to deal with AAdvantage, I’d argue the opposite, and that AAdvantage is much better to deal with — you can hold tickets online for five days, book online, redemption rates are lower, and you can redeposit your ticket for free

    Just my two cents…

  10. @Ben “I would partly restrict Qatar Airways premium cabin award space to the Privilege Club program”

    OUCH!

    We have 1.5M AAvantage miles between the 3 of us here and there is nothing more than I wish to do is burn the entire pile in QSuites or CX F (the virus interrupted 2 trips, on to China, another to Western Australia).

    I understand the business case, but this would hurt. Bad!

    PS, admire your independence from the industry!

  11. Typical review of Qatar Airways from someone that doesn’t understand it.

    1) Rewards are great. 100 QCredits with platinum. That’s a free upgrade in all qsuite long haul. Not sure how that is a weak incentive. Two returns to doha in business is 7k easy. Not a bad perk if you ask me.

    2) Free upgrades to business when free. I’ve been upgraded by QR than any other.

    3) Award fares in gulf are amazing value.

    4) Award space is great.

    5) Credit Cards – As much as you’d all like to Americanise Qatar Air, there is a moral objection to interest in Qatar and they will not accept this. Unfortunately this means you won’t be able to earn affiliate commission on putting idiots in debt

  12. @ upstater — I’m totally with you, I hate to see the trend, but I also understand why airlines do it. American also does the same thing — lots of awards are bookable through AAdvantage as web specials (at low prices), while they’re not bookable through partner programs at the published prices. And thanks for the kind words!

    If Qatar Airways does go this direction, I hope it at least makes redemptions through Privilege Club more lucrative, and makes the miles easier to accrue.

  13. @ Andrew Bushe — I’m not sure I said anything that disputes points one through four? And point five is just silly…

    The point I’m trying to make is that there are huge untapped opportunities for the program to be monetized, and that hasn’t happened up until this point. It seems you’re basically suggesting there’s no way the program should be monetized.

    PS: I’m curious, do you use a credit card, or do you pay everything in cash, by debit card, or by wire?

  14. @Ben

    A quick comment on your statement in the comments ” d) The bigger issue is that even if the value proposition of Privilege Club is decent, the miles are hard to come by; itā€™s much easier for people to buy AAdvantage miles and redeem on Qatar Airways than to book through Privilege Club directly”

    It could be they do NOT want to join the business of selling miles to third parties which them give them to “ordinary” people which then fly QR premium cabin on the cheap. You know, they frequently run 2x/3x/4x/etc Qmiles promos so the people actually flying QR have the option to accumulate many miles.

    Maybe they think it affects their reputation negatively. Obv, just speculating here. But it’s very notable has gotten a lot less aggressive with their promo fares, too. Paying less than $2k for Europe to Australia was like a regular thing. There were semi-regular promos for itineraries such as AMS-DOH-HKT r/t in the EUR 1000-1200 range.

    They ran promos like this all the time. 48h Visa card weekend sale, Travel Festival sale etc. With a huge number of mightily cheap points of origin (SOF, BUD, KBP, IST, AMS, BRU, VCE, ARN, CPH, ……)

  15. You use a US-centric lens. A co-branded Indian, Egyptian or Turkish credit card would probably be more lucrative for QR

  16. @Gordon: Not sure about that. Lucky correctly mentioned that the large margins for CCs in the US market are very unique. There’s also the issue of spending power when you mention India, Egypt, and Turkey.

    No, I really think QR might be thinking about its reputation. Maybe they really don’t want to be associated with middle-class brands (any more).

    You know, I’m German and M&M has no problem in its home market to provide cheap non-premium co-branded CCs. They’ve got no problem cooperating with economy hotel chains. No problem issuing extra miles for a gas station brand. Or a middle-of-the-markt retailer.

    But that affects the brand image. It makes a difference whether you partners are Gucci/The Economist/Amex Centurion or The Gap/USA Today/Samsonite.

  17. Qatar clearly can’t really do enough to buy back customers after their vaginal inspection assaults recently. Maybe if they concentrated more on publishing the sentences of the criminals involved and paid us to return, but even then..NEVER !

  18. I hope that with AA and QR’s increased partnership, there will be some way to get upgrades on a paid ticket from economy to business class for AA elites. On a short 3-hour flight on Qatar last December, business class was almost fully empty on the 777-300ER (about 6/40 seats taken) with economy almost full. Unfortunately, Qatar doesn’t give upgrades to OW elites unless economy is fully booked.

  19. It would be nice to see a ME3 airline consider more global footprints. Not all OW members live in the US nor do all fliers on QR fly via JFK or SFO. Hopefully when travel opens the promised departure points will include YVR and YYZ in addition to YUL.

    So many loyalty programs allow Canadians to participate in the redemption side but totally ignore us on the accumulation side. AMEX in Canada in its largess allows points transfer to AC, CX (Asia Miles), Alitalia, BA, Delta and Etihad. Basically this is the only way to accumulate points other than the few loyalty credit cards available (Aeroplan, Alaska, BA, Cathay, WS (what a joke)). AA had a card they discontinued a number of years back. There is, of course, BonVoy but the airline redemption rate is dismal and the rest of the program sucks.

    AS serves the West Coast of Canada very well and if you can’t stand the low cost all Y of WS and having to always transfer through YYZ offers delightful alternatives to the world with their partners. Unfortunately the loyalty is one-sided as all their promotions and contests with mega mile prizes are for USA only.

    So hopefully your new QR loyalty program will recognize more than just one country.

  20. Great Article!

    Completely agree I would love to be loyal to QR but due to how subpar it is I am left to be platinum with QF (I’m Australian), which is still good but I find myself flying QR at similar amounts to QF (pre covid of course) as I far prefer QR over EK.

    But @Ben you should seriously apply for the job, just because on the long shot you get it, it would be interesting you considering it.

  21. “Cost per mile” is the issue here ! Qatar Airways operating cost is so high and the airline is loosing alot of money in general , probably they have a problem of cost control to identify the true cost of 1 mile so they can start partnering with other entities ! Also the Qatar domestic market is too small to actually to have a good partnership portfolio! I understand if you are suggesting more of international partners but still the US market is Delta’s territory

  22. A good article this.

    As someone who has lived in Qatar for the last eight years I’ve always struggled to decide which program to go through. I started of with Privilege Club until the devaluation so I started saving to AA and used my AMEX for all my spending back home in the UK which I could transfer to AA.
    Now that the Privilege Club is pretty much back to where it was, I am now torn as to what I should do?

  23. There are some very easy wins. For example, they are not an Amex transfer partner in the UK even though they are with the ICC Amex cards and a few other Euro countries.

    As Avios has segment based pricing (primarily to put people off redeeming on partners) there is an opportunity here.

    The real opportunity is probably with status earning. You can make Privilege Club as attractive as you want, but for as long as London to Bangkok on Qatar in J gets you 90% of BA Silver / oneworld Sapphire then that’s where people will credit.

  24. Let’s face it: With the exception of the On-Board experience and some lounges (LHR, CDG, NOT Doha where the food, even in Al Safwa, is inedible), most everything at Qatar Airways sucks. A good example is a$ 400 broken seat voucher which I got in Jan 2020, valid 1 year, IRREDEEMABLE online or anywhere in NYC/JFK and which they refused to extend… They kept the $ 400 but lost the other $ 4,000 of the next ticket.

    So it is no surprise that their FF program isn’t stellar. The truth is that QR is a one-man airline, Akbar Al Baker a genius (*) at the top and very few pople remotely competent below him.

    (*) Difficult but all geniuses are difficult.

  25. Qatar, I flew them second time in my life now during corona. It sucked. I tried to buy up to business class but ā€œit was fullā€ on a plane with 9 other passengers from HKG. Everyone shifting blame on the others why it couldnā€™t be done. I paid more for an extra bag than my own ticket, and they all blamed management that they couldnā€™t sell me an upgrade that was available. One of the worst experiences of my life with an airline. At the end they sent me a $100 voucher for what? Not being able to upsell at the checkin? Or blaming the gate? Very polite people cause otherwise theyā€™re probable fired, but really? Sorry, Qatar is after SAS one of the worst airlines in the world…

  26. I have been SO looking forward to flying Qatar Business with my wife in their side-by-side beds… we are retiring and will be doing 4-6 international leisure trips every year, and I was going to fly them even in cases where it would take us significantly out of our way for their beautiful hard product. BUT, now with the STUNNING change of no assigned seats in Business Class (critical when a couple is flying together!) and no lounge access without paying thousands extra, I will be avoiding Qatar like the plague. Paying what is really full-price Business Class but without lounge access and not knowing if my wife & I will sit together – that is nothing less than SEVERELY insulting! I could not pay for that, and I’m sure many others won’t either. Do they really think people will pay TWICE the price just for those 2 benefits?? We will fly them next Fall on a Los AngelesSouth Africa round trip, but only because we need to use vouchers for trip canceled due to the pandemic. I doubt we will ever fly them again. Even if they wise up and reverse that stunning policy, their image is now forever tarnished.

  27. Iā€™m a student from the Middle East and I love Qatar Airways. I travel to Canada and back home a lot since I study in Canada. I love the new incentive they have for students with the new student privilege club. Iā€™d honestly like to stay loyal to Qatar since coming back home to visit my family is pretty affordable with Qatar Airways. However I wish I had transfer partners or co-branded credit cards in Canada that I could use to transfer miles to Qatar Airways. Before leaving I tried to get my father to sign up for a credit card here with Burgan Bank but the approval process for it is harsh and it got rejected even though he has a long term relationship with the bank.

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