Virgin Australia massively increases Frequent Flyer carrier charges – some up 200% plus – from January 2020

OK – the bean counters are in control, the customer loyalty people must have no spine and left the building. If there is one thing that will piss off frequent flyers, its big cash fees added to the number of points required to redeem a flight award.

From 8 January 2020, the Velocity Frequent Flyer members (Virgin Australia’s membership scheme).

Just remember, these are not fees that the airline must pay out to airports, or tax to governments, or even the ridiculously named ‘fuel surcharge’ (as if a plane could fly without fuel!). These are just charges that the carrier – in this case, Virgin Australia arbitrarily charges those who choose to be loyal to them, and actually use their loyalty points (how dare they!)

Domestic and NZ flights

On domestic and trans-Tasman flights Virgin Australia flights will increase carrier charges from AU$3.50 to AU$10.00 for Economy and from AU$5.50 to AU$10.00 for Business.

International

Short-haul carrier charges will increase from AU$25.00 to AU$35.00 for Economy and AU$50.00 to AU$70.00 for Business.

Hong Kong will also increase from $35.00 to $45.00 for Economy and from AU$50.00 to AU$98.00 in Business.

There’s no change in the charges applying to flights to Los Angeles.

The context

In September 2019, Virgin Australia agreed to buy back 35 per cent of its Velocity frequent flyer scheme from private-equity group Affinity Equity Partners.

In June Qantas announced the biggest change to its frequent flyer scheme in 32 years ^TM, which made various changes to the program including promising to reduce carrier charges.

2PAXfly Takeout

OK – I went for a dramatic headline, and in percentage terms, these are big increases, but in the scheme of things, not a huge drama. They do however chip away at the value of accruing Velocity points. Paul Scurrah, CEO of Virgin Australia, although not the head of Velocity, is a bean counter.

Does this indicate that we will not see any bold actions like turning Virgin back into a low-cost airline or dropping international routes, but instead see a series of small and larger tweaks to bring to airline back into profit?

Just to remind you, although carrier charges have long been a feature of redeeming points at Qantas, Virgin (Velocity) only began imposing them on points redemptions or ‘reward’ bookings in January 2019.