Virgin Australia is in crisis.
Australia’s second-largest airline has just lost its CEO. It’s fighting with unions, who are refusing to accept the drastic cuts to worker pay and conditions proposed by Bain Capital. Business class passengers are being served two-minute noodles and staff are taking sick leave to avoid dealing with all the customer complaints.
Last week, we also learned of cuts to Velocity partner airline benefits – which Velocity announced a month after implementing. Among the changes, Velocity members will no longer earn any points or status on codeshare flights. Seriously, Virgin?!
Virgin Australia has already said it won’t resume long-haul flights for at least several years. Now, there are rumours Bain Capital could be trying to axe even more of Virgin’s remaining international routes. When overseas travel resumes, this will leave Velocity members even more reliant on international partners.
Virgin’s existing network of partner airlines was already patchy. But with these kinds of changes, Virgin appears to be abandoning any serious attempt to cater to international travellers into the future. Qantas and the Oneworld alliance suddenly look more attractive than ever to Virgin’s once-loyal frequent flyers!
The Qantas in-flight experience is now miles ahead of Virgin Australia
The changes at Virgin don’t just impact international travellers. For those travelling within Australia at the moment, the difference between Qantas and Virgin Australia is chalk and cheese.
Qantas has now reopened many of its domestic airport lounges, and the service is arguably better than before. Qantas Business class passengers are once again receiving hot meals, and full catering including alcohol is available on most flights. Wifi is also now available once again on most Qantas domestic flights, although in-flight entertainment is limited.
But there’s still no sign of when – or even if – Virgin Australia’s lounges will reopen. Bain Capital initially said it would eventually reopen most of the airline’s domestic lounges (excluding Alice Springs and Perth T2, which are closing permanently). But Bain has now proven to the Australian public that it cannot be trusted to keep its word. There is no reopening date in sight, and now there are rumours Bain will permanently shutter more – if not all – of Virgin’s airport lounges.
Meanwhile, Virgin is still blaming COVID-19 for offering barely any in-flight service – even though Qantas manages to do so, faced with identical government restrictions. All Virgin Australia guests are being offered just a cup of water and one granola bar – although staff have been told to ration the supply of snack bars and only give them to Economy class passengers on request. This is a clear sign of extreme cost-cutting.
Virgin has already run out of wine and Diet Coke for Business class passengers, and won’t spend any money to order more stock. (Business class passengers notice these kinds of things, and may also choose not to spend any more money on Virgin Business class tickets knowing the service is going to be disappointing. It’s a downward spiral…)
Wifi on Virgin flights remains switched off, and although the Virgin Australia Entertainment streaming app is still available, the content has not been updated since the start of this year.
Virgin’s hardworking staff are doing the best they can, but they’re not being given much to work with. The American private equity firm that bought Virgin is trashing the brand and taking the airline downmarket.
Things at Virgin have gotten so dire – and appear only to be getting worse – that former Virgin frequent flyers have already cleared out their Velocity points and started flying with Qantas instead.
Now would be a great time for Qantas to launch a status match promotion
If there was ever a perfect time for Qantas to offer a status match to Velocity Frequent Flyer members, surely it would be now.
Given the events of the past week, the reputation of Virgin’s new owner Bain Capital is now at rock bottom. Bain has proven to Virgin’s staff, suppliers, unions and – most damagingly – its loyal customers, that it cannot be trusted.
Virgin’s frequent flyers already feel let down after the airline refused to refund their money for cancelled flights. Some are still owed thousands of dollars for international flights that Virgin has no intention of ever operating. (This is in contrast to Qantas, which has eventually refunded international bookings for flights that were cancelled by the airline.)
Qantas is well-placed to capitalise on this. We already saw how popular the Qatar Airways status match for Velocity members was back in May – even though international travel was (and still is) banned, and Qantas domestic flights don’t earn any miles in Qatar’s frequent flyer program. Now, with even more Velocity members fed up and looking for an alternative, just imagine how popular a Qantas Frequent Flyer status match would be right now!
Rex will soon launch flights between Australia’s capital cities, offering another alternative to disgruntled Virgin flyers once normal travel resumes. But by offering Virgin’s top-tier members a status match, Qantas could ultimately be very successful in locking in the future business of many of these members.
There are downsides to offering status matches. For example, it could upset the airline’s existing frequent flyers who’ve had to work hard to achieve their status level. And if you have too many elite members, it can lead to lounge overcrowding and a dilution of benefits for everybody in the program.
But with limited flying happening at the moment, lounge overcrowding is unlikely to be too much of an issue. Besides, status doesn’t cost an airline anything when nobody is flying. And if people are flying, a status match could be the deciding factor to fly with Qantas over a competitor. That’s useful revenue for Qantas.
There is already some discussion on the Australian Frequent Flyer forum about whether frequent flyers are planning to switch to a different airline when travel resumes: When international starts again will you stay with your usual provider?
Qantas already offers a status challenge
Of course, just because I think Qantas should offer a status match, doesn’t mean they will. But if you’re a dissatisfied Velocity member, there are options.
While Qantas does not traditionally run status matches, the flying kangaroo does offer a status challenge. If you’re ready to make the switch to Qantas Frequent Flyer, you can contact the Qantas Frequent Flyer Service Centre and enquire about the availability of a “tier accelerator” challenge. Make sure you provide proof of your existing Velocity status, and a small explanation of your intention to fly Qantas in the future & why you’d like a status challenge.
Here are the contact details for the Frequent Flyer Service Centre:
- Email: [email protected]
- Phone: 13 11 31 (if calling from Australia)
- Or fill out an online form
If you’re approved, you’ll generally have 90 days to earn 200 Qantas status credits for the Gold challenge – or 400 status credits to meet the Platinum challenge. You won’t receive any status benefits during the challenge period, but this does offer a fast-track to earning Qantas status.
The elephant in the room is the “multiple phone conversations with rival Qantas chief executive Alan Joyce” that the incoming CEO of Virgin has been having (as reported by the Australian Financial Review). Collusion, of course, is highly illegal … but perhaps Qantas has been persuaded that offering a status match against such a distressed competitor is anti-competitive?
I am Velocity platinum because I have been flying MEL-LHR Bus class with Virgin 3 times a year + 12-15 domestic. If I can not earn status credits on international partners I will switch airline loyalty. If Qantas wants my $30,000 business they need to offer status match!
They’re too big to care who you fly with. You are a drop in the ocean to them
I desperately hope Qantas does NOT offer status matching. They do not need to (what domestic choice do Virgin flyers have?), it will cost money that doesn’t need to be spent, it will dilute what the rest of have worked for. I am very sorry for Virgin FF, I think Bain are despicable but sorry, not every child gets a medal for participating. I’d cash out those Virgin points ASAP and start the long, slow build up in a new program. As a Qantas FF (amongst others) I hope Qantas does not do this.