Major changes to Velocity Frequent Flyer announced 17/10/24

[Seat0B]

I wrote to Velocity this afternoon via the Contact Us page on their website. I pointed out that despite their claim about the new system being “an inherently simpler way to track and earn status”, it's actually self-evidently more complicated because customers have no idea how many SC's they’ll earn until the moment they pay for a flight and the price is locked in. It's impossible to plan flights to ensure that I maintain Gold under the new system, so I can't see myself making any effort to do so (having previously been Platinum for 9 or 10 years).

Their response was:

Thank you for sharing your concerns about the changes to how Status Credits are earned. I completely understand your frustration with the new fare-based system and how it affects your ability to plan your flights and maintain your Gold status. On behalf of Velocity, we apologise for the frustration and inconvenience it has caused you. Please know your dissatisfaction was never our intended purpose. We strive to assist our members and guests as best as we can but there may be instances where we’ll need improvement which is why we appreciate the time you’ve taken to let us know how you feel. Your feedback about the previous system is important, and I’ll make sure it gets passed along to the team. We genuinely want to create a rewarding experience for our members, and your input helps us get there.

On that basis, I strongly encourage people to get in touch with Velocity to complain - the more, the merrier from our perspective, and if they see how much pain and dissatisfaction they're causing, a review of the changes is an outside possibility........

Sounds like an AI generated response to me…. No actual humans were involved in considering your issues. Though of course, I may be wrong .

 

[drron]

Done this with both Alaska and American and I can vouch that Admiral, Flagship and Alaska Lounges are miles ahead of Qantas and Virgin lounges.

but not Admirals club.

 

[SYD]

but not Admirals club.

Also, AS lounges are hit and miss - some are decent (ie SEA) but LAX is a broom cupboard. Stay in the QF F/J or AA Flagship if you can - unless you have a thing for pancakes.

 

[kileskus]

I don't think these changes were made to attract/retain avid AFF goers. It seems to me that VA is mainly Australia- and Pacific-oriented for the average Australian middle-class single person/family and these changes at best consolidate targeted consumer group or at worst irritate them without irritating enough to make them want to take JQ.

Perhaps being overly optimistic here but by making the frequent flyer program more selective, this makes Virgin somewhat more attractive for a potential accepting alliance. Having half its members seemingly silver+ status would be a glaring liability to any alliance and these changes (I hope) after a couple of years along with (I hope) upgrades in network and service would increase the possibility of them joining an alliance. I see VA as having the potential to be like what S7 was in Oneworld.

That said VA v1 was kind of before my time so I don't remember well the old Velocity

Personally I do fortnightly self-funded leisure trips and the routings via BNE to places in QLD or NT or VQI ZLN etc. are actually pretty similar in status credit earn in the new system and sometimes better earn in direct flights, and being ok on money but short on time it works out. Everyone's situation is different. But I'm sure the boffins in VA did market research and modelling and have figured the upsides for them outweigh the losses.

 

[JohnK]

What an awful enhancement.

If they want reduced business this is the right way to go. Bring on JQ BNE-BKK direct. Who cares about lounge access.

 

[trippin_the_rift]

Keenly awaiting the assessment of @trippin_the_rift

Firstly, we must acknowledge that Virgin is primarily a Domestic airline, and its international partnerships are unpredictable and unsustainable without VA being part of a real alliance that provides a standard set benefit to passengers.

My initial thought is that the changes feel consistent with those made by economists and excel-sheet-lovers, and not by visionaries.
A change to check the box and move them to the next stage. Low risk, low reward.

If you look at the management team makeup of both VA & QF - large percentage of them have worked for a big4 consulting firm.
This provides you with insight on how the decision making process is internally structured. While this is a good thing from a market/management perspective, it means we're unlikely to see anything cool, no risks taken, no funky marketing, no innovation -- and ultimately a QF v2.

Velocity:

The status changes removes much of the behavioural psychology influence - something that the finance types struggle to come to grips with -- that is, a large percentage of status holders globally think, act, spend and fly on an irrational basis.

However, VA being a domestic carrier, and with limited market opportunity for passengers inside Australia - VA will probably get away with using basic economic models instead of having to factor in other factors that Qantas and a real international airline would be majorly impacted by with any change to the status tiers.

Forever Gold: Everyone in the industry knows that lifetime status has a significant downside. Only a handful of carriers have solutions to address this downside (eg: Alaska). That is, most members who earn lifetime status immediately "spend down" or disconnect from the airline entirely. There is no incentive to continue beyond what they NEED to do (eg: if they NEED to fly SYD-MEL weekly...that continues). Velocity could have easily added Forever Gold benefits, e.g., each year you start with 400SC, and all flights forever have double SC. But they didn't, which makes me think it wasn't thought out as deeply as it could have been or perhaps even rushed.

Platinum Plus: Taking benefits away from Platinum and giving them only to Platinum Plus tells you two things:

1. They want Platinum Plus to be the new Platinum. In fairness, 800SC for Platinum is a bit light (and is more on par with QF Gold spending power for status earning). Providing extra context here, Etihad's Platinum (seen as like-for-like on the benefits side as a Velocity Partner airline) requires 120,000 tier miles to earn status, which is approximately 5-6x return business class trips AU->EU. You won't earn EY Platinum for under $50K. Compare that to Velocity Platinum, which most would score for around $10-$15K. So when Velocity talks about a recalibration, they're probably re-adjusting to the current market conditions where the RASK and costs on partner airlines are higher.
2. They ran out of ideas (or budget) to beef up the Platinum Plus proposition.

The changes won't be for everyone. On balance if we take a stab if more or less people will fly VA because of the changes it probably won't change anything. However, it will affect those who barely scrape into the tiers that will be forced between choosing to spend more, or spend less. Depending who is footing the flight costs... depends which direction one may go.

I also envisage tightened corporate travel policies, including specific set amounts that corporations can spend on flights.

The issue VA has created here is that individual members are incentivized to spend more to fly. In USA (where similar things happened years ago), company travel policies almost uniformly and instantly went to "lowest cost flight of the day", and away from a "book what makes the most sense". You can see why I refer to these changes as being driven by economists and 'big4-type' folks. It makes sense on paper, but it makes less sense when you throw in the spanner of human psychology.

I am not a fan of linking status to spend, as it's NOT transparent for many members (eg: you book SIN-SYD (SQ) connecting SYD-MEL-BNE on VA. How much of the ticket value is VA? What if the fare is fuel dumped? What if the primary carrier has YR? What if booked through an agent?) These are the types of situations other airlines deal with on revenue status and revenue accrual models. It becomes a nightmare for some (not all) customers.

Overall, the changes feel like an initial step in the right direction (from an airline perspective), as these are the biggest changes we've seen from the program in more than a decade. Although on the surface, it doesn't seem great for passengers, we ultimately won't know until 18-24 months from now.

The biggest determining factor on Velocitys success here may be if Qantas copies the revenue status model.

ie: If Qantas copies it, then Velocity will look great and it will work out wonderfully.
If Qantas does not copy it, then Velocity will be judged on its own decisions instead of what QF may or may not do.

In summary, it's an "S year" for Velocity.
I look forward to better and more exciting things in the future.

 

[encryptededdy]

One of the "issues" with revenue status earn is that whilst it's simpler for VA flights, it ends up being somewhat more complex because every revenue system still needs a traditional earn table for partner flights (and presumably even VA domestic flights with an e.g. QR code).

One thing I'm wondering is - these changes will affect those who primarily travel internationally on partners the hardest. I wonder if without their own international lounges anymore that these status holders are a net negative for VFF since they have to constantly pay (presumably) their partners UA/NH/QR/SQ for the lounges that their customers use. At least for QF, even if pax don't use QF's international network, their lounge access in Australia will be at QF lounges. There's also been suggestions that for OW, Operating Airline pays so this might not cost QF anything.

Maybe VFF specifically made these changes to cut down on this type of status holder specifically?