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

[eastwest101]

Agree, I still feel all these totally negative large program changes THIS year of all years, are dumber than dirt for Virgin. And many here concur very clearly.

HEAPS of folks nationally will simply fly Jetstar, use miles, or at worst, book only Lite fares when they finally wake up to the real changes. Masses of once loyal and happy Virgin flyers have not had the Penny Drop yet, that it will now cost them ~$5000 a year to keep Gold etc.

All this loses Virgin money - and all will manifest itself in a short period of time.

This changes will NOT make them extra money overall, that is the weird thing. Had they touched nothing at Velocity until the IPO, market share would have stayed about the same. Now it will clearly drop, weakening that juicy IPO pot of money.

All Bain want is cash, and to ride out of town carrying as much of it in their American saddlebags as they can fit in.

The SMART thing to do if anyone in there reads the wind, is the loosening of many of the crazy LG rules, and hand out a lot more LG cards than they budgeted for. FAST. That costs them zero, and will placate many, and plugs the dike a bit.

Add in Family Pooling, and remove the loopy '75% must be Virgin flights' wording, and many past very loyal flyers will make the cut. Give a lot of folks shiny LG cards, and they will not be galloping over to Jetstar/Qantas. Human nature. Carrot and Stick - right now there is just stick.

Seems like the LG scheme is not totally set in stone now, and THIS is the time to ease off, on some of the fine details to stem some inevitable bleeding of revenue and paid seats during 2025. The more loyal Virgin Elite tier flyers urge this to be loosened up, the higher the chance it will be reviewed.

Certainly seems like they weren't necessarily thinking ahead from a communication or a marketing opportunity though. If this was intended to be an awesome marketing opportunity any normal loyalty scheme would have done the calculation and the maths and announced to people how close they were to Lifetime Gold and had that information ready to roll out on the Velocity website, instead we get this rather reluctant process to email a generic address and get a generic PDF of your status history. All that does is hide the changes/info from the uninformed/disengaged members and makes the more informed/engaged customers look at their spend, look at what the airline and loyalty scheme is now compared to what it was, and then sit down and do the maths on the lower earn rate for some fares which have only been going in one direction since Covid. Add to that only one reasonable international partner and the loss of many other partner airlines, routes and frequency and many lounges, and Velocity is looking like a pretty marginal proposition even compared to the Qantas Frequent Flyer scheme! Without Singapore Airlines and Krisflyer options Velocity would be dead to me already.

Seems very much like the Bain finance revenue people have made the decision, got their bonuses and KPI's and are now sitting around asking if someone from the loyalty and customer retention teams should be brought into the room or not. A sort of ex-post-facto consideration.

I am another dual Qantas and Velocity Gold awaiting for my Velocity history to arrive by email, and will have the Amex Virgin lounge entry with BFOD Y and J fares as an option on the table once I earn/retain Qantas Gold for the year. In my particular situation it might be the best of both worlds if Qantas is gouging in the future then I have Virgin as an option with lounge access and slowly sneaking up to Lifetime Gold if close enough, and with Qantas having a much better reach internationally than Virgin as far as partners and lounge access goes, I'm still comfortable flying enough with Qantas to retain Gold annually (but probably not Platinum as its just too high a hurdle for my own circumstances). More international flying and less Family Pooling opportunities (as the kids grow up and move out) also swings the equation away from Velocity and I suspect that I'm not the only one in that position.

I've typically been in the foot in each camp when Virgin was a genuine contender with more partners and seeking my business with the added bonus of keeping Qantas honest competitively, but with Bain having their own agenda, and almost actively discouraging flying with them on certain fare types, it would seem that Qantas will be the beneficiary of my decision-making process if the maths for Velocity don't add up for me anymore.

Maybe once Bain and Qatar have exited the stage, new management at Virgin and Velocity might be reconfiguring things and give themselves a chance to win back my spend with them.

 

[jase05]

Maybe once Bain and Qatar have exited the stage

I honestly think QR are in for the ride and will probably even increase their stake in the coming years. I just don’t see them cutting and running

 

[HS-TQE]

Maybe once Bain and Qatar have exited the stage, new management at Virgin and Velocity might be reconfiguring things and give themselves a chance to win back my spend with them.

But the question is who.

I don't think the infamous historical "tyre kicker" that is Singapore Airlines will be interested considering they've lost billions on their Australian investments across Ansett, Tiger Airways and Virgin Australia 1.0.

Singapore was also directly involved in driving Virgin Australia 1.0 into the ground financially (jointly responsible with Hogan and Borghetti), in addition to losing hundreds of millions on Virgin Atlantic as well (before they sold it to Delta at a loss).

I honestly think QR are in for the ride and will probably even increase their stake in the coming years. I just don’t see them cutting and running

Apart from QR's short lived failed Air Italy investment (Italy Aviation in general is a bigger mess than Australia with the Alitalia debacle), they've generally stuck to their investments for the longer term.

 

[MooTime]

But the question is who.

I don't think the infamous historical "tyre kicker" that is Singapore Airlines will be interested considering they've lost billions on their Australian investments across Ansett, Tiger Airways and Virgin Australia 1.0.

Singapore was also directly involved in driving Virgin Australia 1.0 into the ground financially (jointly responsible with Hogan and Borghetti), in addition to losing hundreds of millions on Virgin Atlantic as well (before they sold it to Delta at a loss).


Apart from QR's short lived failed Air Italy investment (Italy Aviation in general is a bigger mess than Australia with the Alitalia debacle), they've generally stuck to their investments for the longer term.

Oh c'mon, where the usual TaK....post...been a while.

 

[ozstamps]

Does the usual speculation here as to 'cooda wooda shooda' re possible Virgin investment partners have anything to do with this thread? -

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

 

[HS-TQE]

To be fair though, when the changes when they go through, I guess it may be a wait and see over the next few months if it ends up being a "vocal minority" of primarily international codeshare passengers that rarely flies on VA metal (despite some may have flown VA metal in the past to get said status) or if the changes actually damages loyalists that actually fly domestically on VA metal alongside flying international on partners and/or their short haul international leisure network to Bali, Fiji and the Pacific Islands.

Taking into consideration, Bain led management were on record of rather "not competing head on with Qantas", which suggests they are content with being 'number 2' and their focus on being a "value airline" primarily focused on the domestic network.

 

[ozstamps]

'or if the changes actually damages loyalists that actually fly domestically on VA metal'

I am sitting back here wondering, if when heaps of Gold members are not Gold next review date, as they cannot justify spending ~$5000 to retain it, if they will stay flying Virgin almost exclusively?

And there WILL be vast numbers of them. They'll be Silver due to soft landing. Which as we all know offers precious few real benefits. And the year after that, not even Silver in many cases. So minting a lot more LG cards NOW than they planned, for folks with a long track record of flying Virgin, really makes sense now, and costs them zero. Lock in some loyalty before that IPO.

We just booked flights SYD-MEL in a couple of weeks time for a family visit. Being a captive to Virgin and the 60 Status Credits, and as the 'New Deal' re $$ spend Status Credits is not yet in place for a few more days, I like a lemming still booked Choice fares. $189 x 4 = $756 plus credit card fee on top. I must untrain myself! No discount codes work now.

Most here do the same. Correction - in the PAST they blindly did the same I am sure. And AFF is a .001% subset of national flyers. we often forget.

As I recall, Jetstar was about HALF that ticket cost. For most average folks not flying domestic on the bosses's dime, many $100s extra for a short 1 hour flight is simply not going to occur. No way. They just go cheapest possible carrier. Near always NOT Virgin.

In this climate of rising costs and budget tightening, I think Virgin revenue will take a big hit during 2025, when news of this huge program devaluation spreads - as right now lots are not fully aware, or aware at all, of the implications.

 

[Happy Dude]

Stampy - you might be right about the pax exodus to cheaper fares but I reckon it'll happen from 2026 and beyond. Those with status may continue to fly VA not to accrue status but to use their status while they have it.

 

[MooTime]

Stampy - you might be right about the pax exodus to cheaper fares but I reckon it'll happen from 2026 and beyond. Those with status may continue to fly VA not to accrue status but to use their status while they have it.

Exactly right.

Once us WP & SG holders drop to silver or red then BFOD will become most prevalent.

To not use our status would be counter intuitive.

 

[nutwood]

Not sure if handing out LG cards would be a smart move. Once you lock in status, you remove the incentive to achieve that status.
I discovered this when I hit LTG with QA. Lifetime SC's became irrelevant. I'll never get to 75k so all that's of interest is the current year.

 

[simmomelb]

Absolutely correct. I'm currently on platinum, however I'll likely all drop back to gold ~August this year which still gives great benefits until late 2026.
I'd imagine their most loyal will be in much the same boat.
I'll certainly be spending less with VA and be more open minded to other options from next year.

 

[justinbrett]

Allegedly BA said there has been a positive response to their changes and have actually seen an increase in bookings, so they are quite pleased with how they’ve been received, despite the media outrage.

Whether that increase was just people rushing to get one more year of status before they part ways, we’ll have to see.

Similar for VA it will take a year or two to see what effect it has had.

 

[RAM]

One of the changes, slightly removed from this thread's direct focus but directly relevant to the VA focus - ending the Velocity Amex 2 entries to the Amex (now) Centurion lounge (from Anzac Day???) and replacing it with unlimited access to the Virgin domestic lounge.

Looks as if Bain is focusing on filling domestic seats. So, a peeved status chaser who loses out on the SC chase due to the changes just needs to get a Velocity Amex card plus annual fee somewhat (totally) offset by the attached return flight selection from your list. While you lose many Gold benefits you still retain unlimited lounge access (no guests though).

Perhaps this is why Lifetime Gold is not on the agenda? Much better to gain the revenue from the Amex CC co-branding and share of spend revenue...
_________________________________________________

Meanwhile, that Virgin are ending the Amex lounge access on Anzac Day does make me wonder what will be announce to take effect from Anzac Day given their need for lounge access for soon to be Virgin branded Qatar international flights?

 

[ozstamps]

I do agree if EVERY Velocity members had a universal Status expiry date as all savvy USA airline and hotel plans have, and had always had, things would be different. If the entire global member base re-set April 1 like Hilton etc, whole different ball game.

But as we have the current wackadoodle Velocity system, where there are rolling status expiry dates across all 12 months, it is skewed.

And everyone has had near 6 months advance notice on this huge downgrade to the Velocity system.

Folks could have decided 5 months out they were never going to spend the now required $5000 a year with Virgin to renew, and chose to beef up their Qantas Status moving forward, as that is a plan that cleverly has not altered.

So if their plan expiry date was April 1 or May 1 etc, possibly they've been spending little for 5 or 6 months with Virgin.

This move WILL hit revenues, and more and more as the 2025 year goes on, and more Velocity members get the rude shock that Gold is now unattainable for them, despite maybe 10-20 years of loyalty to Virgin.

Market share domestic figures are published all through the year, and they do not lie, and my prediction is Virgin will slide ever further behind Qantas on that metric, proving this theory.

Potential stockmarket investors clearly do not buy into any company in a duopoly whose market share is tanking, and that is what will be occurring if the float goes ahead. So an 'own goal' for Bain here. It WILL cost them money.

 

[MooTime]

I do agree if EVERY Velocity members had a universal Status expiry date as all savvy USA airline and hotel plans have, and had always had, things would be different. If the entire global member base re-set April 1 like Hilton etc, whole different ball game.

But as we have the current wackadoodle Velocity system, where there are rolling status expiry dates across all 12 months, it is skewed.

And everyone has had near 6 months advance notice on this huge downgrade to the Velocity system.

Folks could have decided 5 months out they were never going to spend the now required $5000 a year with Virgin to renew, and chose to beef up their Qantas Status moving forward, as that is a plan that cleverly has not altered.

So if their plan expiry date was April 1 or May 1 etc, possibly they've been spending little for 5 or 6 months with Virgin.

This move WILL hit revenues, and more and more as the 2025 year goes on, and more Velocity members get the rude shock that Gold is now unattainable for them, despite maybe 10-20 years of loyalty to Virgin.

Market share domestic figures are published all through the year, and they do not lie, and my prediction is Virgin will slide ever further behind Qantas on that metric, proving this theory.

Potential stockmarket investors clearly do not buy into any company in a duopoly whose market share is tanking, and that is what will be occurring if the float goes ahead. So an 'own goal' for Bain here. It WILL cost them money.

You seem overly concerned of VA future earnings.

Everything changes over time, airline loyalty industry no different.

We all have to look after ourselves, if VA doesn't suit our personal flying then we have a winge and move on.

It's far from the end of world.

I'm sure there's a lot of smarty heads at Bain very aware what they are doing & their goals.
We here at AFF have a very different perspective on all things flying.

 

[SeaWolf]

Market share domestic figures are published all through the year, and they do not lie, and my prediction is Virgin will slide ever further behind Qantas on that metric, proving this theory.

Looking at the ACCC report from Feb 2025 in Dec 2024 Virgin's domestic market share overtook Qantas and they became the largest domestic carrier by market share, a 3.1% increase since July (pages iv and v). Looking at the historic market share graph (page 18), you can see that this is the first time Virgin has overtaken Qantas in domestic market share and is a combination of rises in Virgin's market share and falls in Qantas' market share.

Of course, Virgin's share always goes up in Dec/Jan as there are increased leisure bookings, but there's no way you can imply that its market share is sliding by speculating that it will "further" slide. It's simply not doing that.

 

[levelnine]

The other piece of the puzzle is that Qantas has not changed its status earning in a while, and has flagged changes might be coming this year.

If they follow VA/BA/AA/DL/UA/etc/etc and adopt a revenue based scheme, VA's might look positively cheap by comparison. Eg if they split the difference between VA and BA in terms of amount needed to reach the higher tiers.

 

[simmomelb]

Market share domestic figures are published all through the year, and they do not lie, and my prediction is Virgin will slide ever further behind Qantas on that metric, proving this theory.

"Slide even further"? Quite the contrary. They currently have the biggest market share domestically, bigger than Qantas or Jetstar.
Of course, things can change but you sound very doom and gloom when none of that has transpired.
Edit: Sorry, I see the market share part was already answered above by Sea Wolf in much more detail than my effort

If they need to adjust the Velocity loyalty program to beef up loyalty further, they have the tools to do that, as all airlines do from time to time through loyalty promotions.
These changes were clearly not a last-minute brain fade; based on their internal projections, they would have considered many options.
At the end of the day, they want higher-value customers, and whether that negatively impacts some of us here on AFF is irrelevant.
If I can't maintain Platinum moving forward, for example, then I am not their target market for that tier, so be it.

 

[serfty]

Whether that increase was just people rushing to get one more year of status before they part ways, we’ll have to see.

I suspect there were quite a few BAEC members close enough to life time Emerald status to make the effort to push on before it may become uneconomic.

I am in the situation where due to fortuitous timing I may be able to achieve the Platinum Plus level early next year, hopefully giving me at least gold status to 2029.

 

[nutwood]

These changes were clearly not a last-minute brain fade; based on their internal projections, they would have considered many options.
At the end of the day, they want higher-value customers, and whether that negatively impacts some of us here on AFF is irrelevant.
If I can't maintain Platinum moving forward, for example, then I am not their target market for that tier, so be it.

I'm not sure about the higher value customers, it seems to me that these changes favour the lower end of the market?
As an example, I did a quick return trip to Lismore this week. LST-MEL-SYD-BNK, then back again. Cost around $1500, J all the way. 330 SC's under current rules, 125 SC's after April. Looking ahead a bit and picking an equivalent trip in Choice (trying for cheapest) it's looking like about $900 return. Under current rules, 90 SC's, after April; 75 SC's. Major devaluation for higher spending passenger, considerably less for lower end.
Relevant to above, LST - BNK return on Jetstar can easily be done for <$600.