Qantas and Virgin Australia are locked in an arm wrestle for the other airline's elite flyers, and the winner is Qantas and Virgin's frequent flyers with gold status and above.
Qantas fired the first shot at the end of November when the airline issued an invitation to upper-tier members of 16 other airlines' loyalty programs to switch to Qantas, with a fast track to gold tier status as the bait. Eligible flyers who take up the Qantas Status Fast Track offer before December 18 are being offered 90 days of complimentary access to Qantas lounges. Those flyers who do, and who earn 100 status credits within those three months, qualify for Qantas' Gold membership for one year. For those who make the grade that's a generous offer since achieving Qantas Gold would usually require 700 status credits.
Among the perks, gold tier members get access to Qantas lounges and Oneworld's global lounges, preferential seating, priority access to reward seats, priority check-in, boarding and a smile at the check-in desk when they make an upgrade request.
The list of those eligible for the offer includes gold tier and above frequent flyers who belong to the loyalty programs of Air New Zealand, Delta, Etihad, Singapore Airlines and United, to name just a few. At the very bottom of the alphabetical list, there's Virgin Australia. And it's VA's Velocity gold and platinum members who are the real target here.
One of the requirements for the Qantas offer is an Australian residential home address. Thus, Qantas isn't really interested in offering gold tier membership to Thai Airways Royal Orchid Plus Gold members, nor to gold members of Air New Zealand Airpoints frequent flyer program. They want to carve off Virgin's most valuable frequent flyers.
Virgin hits back
Virgin Australia wasn't going to take that lying down. On December 7 the airline came back with a see-you-and-raise-you move of its own, and no bones about it – Qantas Gold and Platinum flyers were the only ones in the gunsight. Included in the announcement of the VA were several not-so-subtle references to the Qantas offer, such as "Not one to be outdone by a competitor…"
Using the same template as the Qantas offer to VA frequent flyers, all Qantas gold and platinum members have to do to qualify for a three month Velocity Discover Gold Status trial membership is complete a short expression of interest form by December 21 2020. That entitles them to complimentary lounge access, priority boarding, preferential seating and a beefed-up checked baggage allowance.
If they take just one eligible flight and earn 80 status credits during their three-month trial period, those Qantas flyers can retain their Velocity Gold status for 12 months, with companion membership thrown in. As well as access to the airline's domestic lounges for a guest and up to three children, the perks include claims to 'Fly ahead' seats aboard earlier flights where available.
Eligible flyers could rack up those 80 status credits and more required for one-year Velocity Gold membership with just one qualifying return business class flight between Melbourne and Sydney. By contrast, one Qantas business class flight over the same route would earn 80 status credits, 20 short of the number required to qualify for fast track to Qantas Gold membership for one year.
Virgin Australia also used the occasion to remind existing gold and platinum members of the airline's Velocity frequent flyer scheme that their status has been preserved during the period when flights shut down during the pandemic. Existing Gold and Platinum members need to take just one eligible flight with Virgin Australia before 28 March 2021 to have their existing status extended for one year.
The Qantas Status Fast Track offer is probably a more attractive deal for VA's gold and platinum flyers than the competing offer from Virgin for Qantas' frequent flyers. Qantas has more business lounges than VA, and more flights across a wider network. On the other hand, Qantas gold and platinum members flyers have nothing to lose by dipping their toe into Virgin's waters. It's a different style and Virgin Australia will likely be pulling out all stops to keep those highly valued business and upper leisure travellers on board and happy. The relative paucity of VA lounges in regional cities shouldn't worry those who are flying capital city routes only. Another plus, Virgin has signalled its intention to fight long and hard to regain its share of the Australian market, and with Bain Capital at its back it has deep pockets. One of the planks in that strategy is to undercut Qantas fares across the board, including its business class fares.
What about loyalty points?
Its business as usual for the reward schemes of Qantas and VA, and both airlines are looking to lock in their flyers with ever more ways to earn points and redeem them.
Qantas has recently announced that its points can now be used to pay for rail trips aboard some of Australia's iconic rail journeys, including The Ghan and the Indian Pacific, the first time Classic Reward Seats have been offered on the ground. Trips taken on those train trips will earn Qantas point for each dollar spent on Journey Beyond Rail Expeditions trips. At a time when overseas leisure travel is out of reach for Australians that's a good reason for Qantas flyers with big balances to open their reward-points coffers.
In the words of Qantas Loyalty CEO Olivia Wirth: "Ninety per cent of our members want to use their points for travel so the ability to explore the country by rail is an exciting alternative for frequent flyers and a real drawcard for our program."
Despite Virgin Australia's change of ownership, point balances are intact, and why wouldn't they be? Airline points build loyalty, and they earn heaps for airlines since their points are a valuable commodity that they sell to retailers and financial institutions who then use them to reward customers. Some airlines earn more from selling points than they do from flying passengers around in the skies. There's also beauty in the system since the airline controls the redemption rate. The number of reward seats an airline offers is in inverse proportion to demand from fare-paying passengers, so as not to jeopardise revenue.