Virgin Australia changes Velocity frequent flyer award redemptions

Virgin Australia will adjust the price of reward seats redemptions through its Velocity frequent flyer scheme for the first time in five years, with the outcome set to prove a mixed bag for loyalty program members depending on their booking plans.

In addition, when the changes take effect on June 1, Velocity points are now set to expire in two years if there is no activity on a member account, as opposed to the current allowance of three years. Qantas frequent flyer points expire if there is no activity over an 18-month period.

The cost of premium economy and business class seats on Virgin, Delta, Virgin Atlantic, Virgin America and some Air New Zealand flights will rise for every distance, but it will take fewer points to redeem flights on economy class journeys of more than 4801 miles (7700 kilometres). 

The number of points needed to redeem flights on partners such as Singapore Airlines, Air New Zealand long-haul services, Hawaiian Airlines, airberlin and South African Airways will for the most part decline under the new system.

However, Etihad Airways will now join that grouping of airlines rather than staying in its previous grouping with Virgin, meaning redemptions on the Abu Dhabi-based carrier will require more points. Virgin said the change reflected the relative costs Velocity incurred for purchasing seats on Etihad.

Virgin sold 35 per cent of Velocity to private equity group Affinity Equity Partners for $336 million in 2014, but until now it had not made any changes to the level of points needed to redeem on flights.

"These are the first changes that have been made to the points expiry period or the reward seats points tables since they were introduced to the program more than five years ago," a Virgin spokeswoman said. 

"During this time Virgin Australia has undergone significant changes to become a full service airline, providing all guests with a complimentary checked baggage allowance, in-flight entertainment, food and beverages."

The Velocity program reported first-half underlying earnings before interest and tax (EBIT) of $70.8 million, up 56.6 per cent. For comparison, the rival Qantas Loyalty division's underlying EBIT rose by 10 per cent to $176 million in the first half. Velocity has 5.7 million members, while Qantas frequent flyer has 11.2 million members.


Qantas last month lowered the cost of international flight reward redemptions in economy class on many routes.

Under the new Velocity points earning table, a one-way economy class flight from Sydney to Melbourne will require 7800 points and $21.11 in taxes and fees on Virgin versus 8000 points and $33.98 in taxes and fees on Qantas.

For a one-way business class ticket from Brisbane to Los Angeles, Virgin will require 95,500 points and $137.73 in taxes and fees compared with 96,000 points and $465.33 in taxes and fees on Qantas.

Velocity members can make bookings using the old award tables prior to June 1.

This article Virgin Australia changes Velocity frequent flyer award redemptions was originally published in The Sydney Morning Herald.