It’s been a turbulent year in travel. One big change – of many – has been Virgin Australia’s descent into voluntary administration.
As Virgin Australia transitions into a more middle-market offering, in order to struggle back to its feet, Velocity points holders are losing some of the perks they used to take for granted.
As DMARGE reported in June, the revolution isn’t going to take Virgin Australia to the cost-cutting depths of Ryanair, but it is certainly going to offer a less premium service moving forward.
Bain Capital’s Sydney-based managing director Mike Murphy told The Australian earlier this year Virgin Australia would be reborn as a hybrid airline with a low-cost base and a more integrated Velocity frequent flyer program.
This has started coming true.
Unfortunately, along the way, predictions like that of Flight Hacks founder Immanuel Debeer have also come true. As Debeer told DMARGE in May, “Frequent Flyer points won’t just disappear but when all this is over, their value will most likely slump depending on how things play out.”
“Velocity has shut down all options of redeeming points so those who didn’t act will need to hope that whoever buys out the assets knows how to run a frequent flyer program.”
Though the freeze on Velocity points usage is now over, an Instagram post last week by Debeer suggests he feels vindicated in his misgivings, with 67% of respondents to a poll the frequent flyer put out claiming to have moved their points out of their Velocity account (and with Debeer claiming to be “super glad” to have already done so).
“I cleared out my points as soon as I got a hunch of VA’s downfall,” Debeer told DMARGE.
This comes after Virgin Australia last week infuriated some business class passengers by serving them instant noodles.
“I think Bain is on a cost-cutting spree and these days you can get away with almost anything in the name of COVID,” Debeer told DMARGE.
“Virgin used to have (in my opinion) the world’s best domestic business class product in terms of food, service and seats. Now we’re seeing the (don’t take offence) ‘Americanisation’ of business class.”
— boringaccountant (@ildiko42749502) October 13, 2020
“With all Virgin Australia lounges closed indefinitely and economy grade hot meals served in Business class, unfortunately there’s [now] very little to differentiate between the Virgin Australia’s onboard business class experience and the economy cabin,” Adele Eliseo, founder of The Champagne Mile, shared with DMARGE.
All this also comes after a recent update to the Virgin Australia Velocity Frequent Flyer scheme, in which various perks were cut.
“These changes come as a significant blow to Velocity members, continuing the reduction of benefits for those members who hold elite status,” Flight Hacks reports, further explaining “Velocity members will no longer earn points when travelling on flights with Virgin’s international partner airlines, such as Singapore, Delta and Etihad.”
Though most Australians can’t fly anywhere internationally anyway right now, “if that rule stays in place in 2021, then booking to fly with partner airlines through Virgin won’t seem so appealing, and passengers might opt for other alternatives,” news.com.au reports.
“That in turn makes the partnerships less valuable overall.”
Velocity is currently trying to persuade customers to spend their points domestically, offering 30% off the points needed for redemptions in Australia.
That said, given how ‘flighty’ business class passengers can be without a solid frequent flyer scheme to lock them down, it appears Virgin Australia will need to do more to keep them in their gilded cage.
They also need to do more to convince Australians of the new Virgin Australia philosophy, with the imminent exit (and alleged coup against) Virgin Australia CEO Paul Scurrah bearing the hallmarks of what Australian Aviation have called “the start of a classic private equity smash-and-grab operation.”
Fly the friendly skies? Not so much.