Zip just joined forces with another ASX 200 company

A major airline now allows travellers to pay for their flight after they return home, in a landmark deal.

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Qantas Airways Limited (ASX: QAN) announced on Thursday that it would allow customers to split their fare payments through fellow ASX 200 company Zip Co Ltd (ASX: ZIP).

The buy now, pay later service will be available for both domestic and international bookings.

According to Qantas Loyalty chief Olivia Wirth, this is the first time the airline had joined forces with a buy now, pay layer provider.

“The option to buy now, pay later through Zip gives our customers more choice in how they pay for their flights,” she said.

“With Zip they can spread the cost over time choosing flexible repayments, and also earn Qantas points on the payment as well as the flight itself.”

Aussies ‘making up for lost time’, jetting off everywhere

Qantas shares have been a beneficiary of Australians moving past COVID-19 restrictions, now trading more than 5.6% higher than where it started the year.

“After two years of restricted travel Australians are making up for lost time,” said Wirth.

“Domestic travel is back at pre-COVID levels while international travel is building back strongly to destinations like the US, Europe, Bali and Fiji.”

Zip investors will be hoping some of Qantas’ magic will rub off on them, as they have watched their shares shrink almost 80% since 1 January.

The stock even hit a new four-year low on Thursday.

Even at the bargain-basement price, only four out of 10 analysts are recommending Zip shares as a buy, according to CMC Markets.

Double dip on Qantas points

Zip ANZ managing director Cynthia Scott said the deal with the airline would give travellers “control of their finances” after they return home.

“We are also giving freedom and choice back to customers by giving them the option to pay for their trip before they go, or when they get back,” she said.

“Our research shows that buy now, pay later users are more likely to travel in the next 12 months compared to non-users… In fact, more than 75% of Zip customers intend on travelling in the next 12 months.”

Travellers who use Zip to delay their payments can also “double dip” by earning Qantas points through the Zip Rewards loyalty programme.

“We’re continuing to develop new partnerships like this one with Zip to give our frequent flyers more ways to earn points,” said Wirth.

“It helps keep members engaged in the program and ultimately drives value for our business.”

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. 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 Scott Phillips.

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