Back in February Virgin Australia’s Velocity frequent flyer programme unveiled changes to its reward seat pricing.
In summary – many Virgin Australia operated routes are going up slightly in price, while Etihad redemptions are going up significantly.
Given the changes will come into effect from June 1st, that leaves just this month to take advantage of the current pricing – and along with the current transfer bonus it’s worth planning accordingly.
The planning you can do now
If you have a significant enough Velocity points balance already in your account, or can transfer some points over to Velocity in the current 15% bonus promotion, then start considering whether your travel plans are firm enough to start researching award availability.
Given enough points, if you are planning a redemption using Velocity points for Virgin Australia Premium Economy or Business Class, or with Etihad:
- Start looking for availability now and consider booking under the current pricing before May 31 if you find flights to suit
- Worst case scenario, if the dates you book do not end up working out then you will have lost the $60 change fee Velocity change for cancellations and you’ll get the points back in your account
If you are planning a redemption using Velocity points for Singapore Airlines operated flights, then you’re probably going to be better off waiting until the pricing changes come through, as the price for Singapore Airlines redemptions is going down on June 1, making it more compelling to redeem through Velocity instead of transferring points to KrisFlyer thanks to Velocity’s lower taxes.
That said, if plans are firm, and the award seats needed are available now, then the pricing changes probably wouldn’t impact my preference to book sooner to lock in the seats.
Summary of the Velocity changes coming in June
- Premium Economy and Business Class redemptions on Virgin Australia and it’s key partners (Delta, Virgin America, Air New Zealand) are going up a touch across the board, both for domestic and international routes
- Etihad premium cabin long-haul redemptions are also going to be more expensive, while Singapore Airlines redemptions through Velocity are coming down in price.
Note that Velocity said that this will be the first time in over five years the programme has made changes, and it has given Velocity members three months notice before the changes kick in on June 1.
Like most frequent flyer programs, the changes to pricing are constant and are to be expected – anyone looking for stability over a long-term horizon is better not playing the points game at all. After the changes are implemented I feel that the new pricing for Virgin Australia and Etihad flights are still reasonable.
An overview of the full set of Velocity changes for June 2016 onward
The glaring change from June 01 2016 is the relocation of Etihad Airways from the much cheaper Table 1 to the much dearer Table 2.
From June 01 2016, Table 1 will include Virgin Australia, Virgin Samoa, Virgin Atlantic, Delta Airlines, Virgin America, Air New Zealand (Trans-Tasman Services).
From June 02 2016, Table 2 will include Etihad Airways, Singapore Airlines, Silk Air, Air New Zealand (New Zealand domestic and long haul services only), airberlin, Hawaiian Airlines, South African Airways.
What is happening after June 01?
In addition to moving Etihad to Table 2, Velocity has also tweaked the number of points required for redemptions in Table 1 and removed First Class from table since Etihad is no longer part of Table 1.
The changes are mixed, with some Economy Class redemption seeing small declines whilst Premium Economy and Business Class reward seat prices will increase.
In Table 2, the changes are also mixed bag, with Velocity increasing the points required for shorter journeys and for longer distances, the number of points fall significantly.
How do the changes affect travellers to Europe, the US and Asia?
Let’s take a look at a few examples of popular routes redeemed by Velocity members and compare.
Virgin Australia does not fly all the way to Europe and the UK – only to Abu Dhabi, with Etihad Airways carrying you on the tail end of journey, so we cannot predict how Velocity will price the reward seat when mixed with partners.
We can assume that Velocity will continue to price the reward seat redemption as two separate awards, if you were to fly Virgin Australia from Sydney to Abu Dhabi and Etihad Airways onwards to Europe or UK.
|Route||Between now to May 31 2016 (Etihad and Virgin Australia from the same Table 1)||From June 01 2016 (Etihad from Table 2 and Virgin Australia from Table 1)|
|Australia East Coast to London or New York||Economy: 62,000 points|
Business: 125,000 points
First Class: 187,500 points
|Economy: 75,000 points with Etihad|
Business: 139,000 points with Etihad
First: 203,000 points with Etihad Airways
|Australia East Coast to Abu Dhabi||Economy: 47,000 points|
Premium: 70,500 points (Virgin Australia from Sydney)
Business: 94,000 points
First Class: 141,000 points
|Economy: 56,000 points with Etihad|
Economy: 44,800 with Virgin Australia
Premium: 71,700 points (Virgin Australia from Sydney)
Business: 95,500 points with Virgin Australia
Business: 104,000 points with Etihad
First: 152,000 points with Etihad
|Australia West Coast to London||Economy: 55,000 points|
Business: 110,000 points
First Class: 165,000 points
|Economy: 65,000 points with Etihad|
Business: 121,000 points with Etihad
First: 177,000 points with Etihad Airways
|Australia East Coast to Los Angeles with Virgin Australia||Economy: 47,000 points|
Premium: 70,500 points
Business: 94,000 points
|Economy: 44,800 points|
Premium: 71,700 points
Business: 95,500 points
|Australia West Coast to Abu Dhabi||Economy: 35,000 points Etihad|
Business: 70,000 points Etihad
|Economy: 42,000 points with Etihad|
Business: 78,000 points with Etihad
Singapore Airlines and other partners reducing in price (in Table 2)
From June 01 2016, the pricing for a majority of awards in Table 2 are falling, so this means fewer points for redemptions on Singapore Airlines.
This could provide a compelling option for Velocity members to redeem flights on Singapore Airlines using Velocity points because the fuel surcharges and taxes are lower with Velocity when compared to Singapore Airlines KrisFlyer Miles programme.
Velocity members still cannot redeem First Class on Singapore Airlines and must transfer Velocity their points to KrisFlyer to redeem. Therefore, we have not included First Class in the comparison below.
|Route||Between now to May 31 2016 Singapore Airlines||From June 01 2016|
|Australia East Coast to London or New York||Economy: 75,000 points|
Business: 175,000 points
|Economy: 75,000 points (unchanged)|
Business: 139,000 points
|Australia East Coast to Singapore||Economy: 35,000 points|
Business: 70,000 points
|Economy: 28,000 points|
Business: 53,000 points
|Australia West Coast to Singapore||Economy: 35,000 points|
Business: 70,000 points
|Economy: 28,000 points|
Business: 53,000 points
Reward Seat Points Table 2 – valid for redemptions made up to 31 May 2016
Singapore Airlines, Silk Air, Air New Zealand (New Zealand domestic and long haul services only), airberlin, Hawaiian Airlines, South African Airways
Reward Seat Points Table 2 – valid for redemptions made on or after 1 June 2016
Etihad Airways, Singapore Airlines, Silk Air, Air New Zealand (New Zealand domestic and long haul services only), airberlin, Hawaiian Airlines, South African Airways
How do the changes affect travellers on Virgin Australia?
The changes to Table 1, which includes Virgin Australia operated flights, are generally small increases of up to around 3% for Business Class travel.
For Economy, domestic flights are going up for shorter routes from around 800 to 2,000 Velocity points. Some economy flights in the pricing table are coming down in cost, but these are mostly in the distance brackets beyond most of Virgin Australia’s domestic routes, so the real-world cost reductions are minimal.
Reward Seat Points Table 1 – valid for redemptions made up to 31 May 2016
Virgin Australia, Etihad Airways, Virgin Samoa, Virgin Atlantic, Delta Airlines, Virgin America, Air New Zealand (Trans-Tasman Services)
|Zone||One-Way Miles||Economy||Premium Economy||Business||First|
Reward Seat Points Table 1 – valid for redemptions made on or after 1 June 2016
Virgin Australia, Virgin Samoa, Virgin Atlantic, Delta Airlines, Virgin America, Air New Zealand (Trans-Tasman Services)
|Zone||On-Way Miles||Economy||Premium Economy||Business|
Velocity point expiry and account activity changes
Velocity is also making changes to the expiry of points, and what counts as account activity to keep your points active.
From 1 June 2016 Velocity Points will not expire provided you earn or redeem Points at least once every 24 months. Previously, the expiry period was 36 months. Any Points earned from eligible activity prior to 1 June 2016 are not affected by this change and will not expire for 36 months.
Secondly, transferring Points between family members or receiving Points from a Family Pooling relationship will no longer be considered eligible activity to prevent your Points expiring. This change will be applied retrospectively.
Summing up – what’s our take
Award table price changes are a fact of life of frequent flyer programs. While I didn’t think that Velocity would make a change soon, some changes were inevitable given:
- How much Virgin has changed as an airline
- How many new partners it has brought on in the last few years
- How Velocity has been developed as a frequent flyer program outside of the airline’s total ownership
- And the context of the industry and frequent flyer landscape as a whole.
In many cases Velocity’s award prices are slightly cheaper than the equivalent route with Qantas or it’s partners, while the increase for Etihad redemptions is in line with what we saw from American Airlines’ price changes for Etihad redemptions previously.