Virgin Atlantic Flying Club – A Fresh Look at the Impact of the Upcoming Changes

Virgin Atlantic Flying Club

Every “enhancement” to an airline or hotel loyalty programme is usually met with outrage, at least in the small subset of people such as myself who really care passionately about this hobby. But after awhile, most people get used to the new situation and just get back to earning and burning miles, taking advantage of sweet spots, etc.

Virgin Atlantic announced some changes to the Flying Club. You can read about them here. The initial reaction of many was negative. After all:

  • Paid discounted economy fares will now earn 50% of the miles instead of 100%
  • Upper Class awards will increase substantially in price

But, are these changes actually all that bad for the vast majority of Flying Club members? Let’s look at the various subsets of potential Virgin Atlantic passengers…

Families Travelling in Economy Class

I believe my blog’s highest traffic day occurred when it was mentioned on a Disney-related discussion board. So, let’s look at a family travelling to Orlando, the vast majority of whom will be travelling in Economy.

Current System

Miles earned for return London Gatwick to Orlando in Economy –> 8,682 miles

Miles required for return London Gatwick to Orlando in Economy –>42,500 miles

5 return paid flights from Gatwick to Orlando will earn enough miles for a return award in Economy.

Future System

Miles earned for return London Gatwick to Orlando in Economy –> 4,341 miles

Miles required for return off-peak London Gatwick to Orlando in Economy –> 25,000 miles

Miles required for return peak London Gatwick to Orlando in Economy –> 45,000 miles

Although difficult for families due to school schedules, travelling to Orlando off-peak will now require 6 return paid flights. Travelling during the summer school holidays will now require 11 return paid flights.

Let’s face it. Under both systems that’s a lot of trips to visit Mickey in order to earn enough miles to get an award ticket, which as we all know also requires a co-payment of £250 or so to cover taxes and surcharges.

But since families probably aren’t taking annual trips to Orlando hoping to eventually earn a not-free award, how are they getting there using miles? Probably by shopping at Tesco and converting their Clubcard points to Flying Club miles…  Or using a credit card to accumulate miles… Neither of which are likely to change much going forward.

So, these changes might not make any difference. Travelling at off-peak times will result in a substantial reduction in miles required, whilst there is only a small increase in the miles required for peak travel. (which coincides with the largest savings versus the cash fare)

In my opinion, families who can travel at off-peak times, and know how to accumulate miles apart from paid flying – they will be winners. Those who blindly earn miles only from occasional flying and hope to one day earn an award – they will lose out.

A Couple Travelling in Premium Economy Class

Our hypothetical couple – perhaps retired, perhaps professionals – have enough disposable income to fly in Premium Economy and like to holiday in the Caribbean, let’s say Antigua. They book far enough in advance to take advantage of the cheaper, discounted P|E fares.

Current System

Miles earned for return London Gatwick to Antigua in H/K class –> 12,232 miles

Miles required for return London Gatwick to Antigua in P|E –> 70,000 miles

6 return flights in Premium Economy from London to the Caribbean will earn enough miles for a return award in Premium Economy to the Caribbean.

Future System

Miles earned for return London Gatwick to Antigua in H/K class –> 8,186 miles

Miles required for return off-peak London Gatwick to Antigua in P|E –> 35,000 miles

Miles required for return peak London Gatwick to Antigua in P|E –> 55,000 miles

4+ return flights in Premium Economy from London to the Caribbean will earn enough miles for a return award in Premium Economy to the Caribbean during off-peak periods. Nearly 7 return flights in Premium Economy will be required for a peak award.

The changes announced by Flying Club appear to me as a way of targeting Virgin Atlantic as the “Premium Economy” airline, particularly on the award side. Perhaps this is not surprising since taxes and surcharges cost £200-250 for Economy awards, but £400+ for Premium Economy awards. Part of that is the UK’s tax treatment of “premium”, part of that is an increased surcharge going to Virgin Atlantic.

It’s hard to imagine a scenario where Premium Economy passengers lose out. The miles required for an award will decrease for both peak and off-peak periods. A retired couple who can travel at any time are big winners. Anybody accumulating miles apart from flying are winners. Even my hypothetical professional couple might be earning miles from business travel in Upper Class – they will be winners as well!

Business Traveler in Upper Class

This hypothetical Flying Club member travels to New York frequently in Upper Class and, accordingly, likes to travel on holidays in Upper Class as well. To avoid complicating matters, I will ignore that this traveler probably makes it to Gold status and earns even more miles.

Current System

Miles earned for return London to New York in flexible Upper Class –> 20,778 miles

Miles required for return to most places in Upper Class –> 100,000 miles

5 return flights in Upper Class to New York will earn enough miles for a return in Upper Class to most places in Virgin Atlantic’s route network.

Future System

Miles earned for return London to New York in flexible Upper Class –> 27,704 miles

There are too many changes on the award side to make a blanket judgment. However…

  • The business traveler will earn 33% more miles from flying Upper Class.
  • The largest increase on the award side is 55%, for peak travel to the U.S. West Coast
  • Most other increases on the award side are below 35%

Therefore, anybody travelling in Upper Class, especially using OPM (other people’s money), will be winners. The only losers are those who like travelling to Las Vegas (or elsewhere on the west coast USA) at peak times.

Travel Hackers / Credit Card Churners

This final group includes people like me. Somehow, I’ve never spent my own money on a Virgin Atlantic flight, but have taken numerous award flights on Virgin Atlantic. Most airlines I suspect have a love/hate relationship with these types of loyalty programme members. They love the revenue from selling miles to credit card companies, or other non-flying partners. But they probably hate the fact that many of these people are only loyal to the extent they receive premium class travel without really paying for it.

The award chart changes are clear. Virgin Atlantic want to tempt members into booking Premium Economy awards instead of Upper Class awards but, if we insist on Upper Class, we’re going to pay more for the privilege…

Overall Conclusion

The trend in airline frequent flyer programmes is clear – reward those who provide the highest revenue through the highest fares. I am not the first to suggest that this policy ignores the subtleties of consumer behaviour by giving leisure travelers less reason to choose a particular airline. (filling an empty seat in Economy is pure profit, but rewarding the person who bought the always-going-to-sell last seat might not be) But perhaps airlines truly know more than bloggers, and therefore are acting in their best interests.

Business Class award travel? Going to cost more. There are too many miles in circulation and too much demand. Simple supply and demand…

My other conclusion is nothing new. If you are dis-engaged and uninformed about your frequent flyer programme, you are going to continue to lose out. If you continue to believe that you can fly once in awhile (but only with the lowest cost airline) and eventually earn enough miles for a free flight, I wish you luck…  Virgin Atlantic Flying Club have decided that casual travelers are not loyal enough to care about. So, start paying more attention, earn more miles on the ground, and take advantage of the reduced mileage requirements for Economy and Premium Economy awards…

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