Virgin Atlantic Flying Club has announced that from October 30, 2024, the program will be moving to a dynamic award pricing model. I suppose I should be thankful that Virgin Atlantic provided any notice at all since the last few devaluations have gone unannounced, but I’m nonetheless disappointed as it is hard to imagine this being a positive development for those who collect miles hoping to get outsized value when redeeming for rewards. Further unfortunate is the fact that we can only imagine the details since Virgin Atlantic isn’t releasing much information about the changes apart from the fact that they are coming.
Dynamic pricing coming soon
Virgin Atlantic is framing this as a positive for consumers, indicating that they will be able to redeem their Virgin points for any seat on any flight. While that sounds nice on the surface, it will very likely come at the cost of losing the opportunity to get outsized value from points in most cases. While you may be able to redeem your points for any seat on the plane, that is of limited use if the “sky is the limit” on award pricing. As View from the Wing points out, we don’t have any indication as to just how high award prices may climb.
To be clear, it isn’t that the ability to redeem points for any seat is inherently bad, but rather the fact that if points become worth a more fixed amount — like 1c per point, for example — then there begins to be less advantage in collecting airline points over collecting cash back and buying whatever seat you want. Locking yourself into airline miles becomes less attractive overall as they become more cash-like toward award tickets because you’re better off having actual cash that you can use on anything if all else is equal. Furthermore, a lack of a goal post (in the form of an award chart) makes it impossible to plan for how many points you will need for an award that is meaningful for you. That makes it hard to consider crediting flights to Virgin Atlantic and accruing Virgin Atlantic points on an ongoing basis through spend on their credit cards, etc.
Virgin Atlantic touts that there will be “a new Saver reward seat product” that will have some seats price “at or below today’s prices”. Virgin claims that these Saver seats will be available at or near all-time low prices. However, there is quite a distinction to be made here: While in 2022 Virgin Atlantic launched “Guaranteed Availability”, making 12 seats available on every flight, these new “Saver” seats “will be available across thousands of flights”. Read in between the lines: don’t expect to find Saver awards on every flight. I expect that we’ll see low award pricing at off-peak times when cash prices are also low.
Companion and upgrade vouchers will now be available to use “on any seat”, but you’ll need to kick in points if the seat you choose is an expensive one: vouchers can be redeemed for a maximum value of “75k points for Flying Club Red tier members or 150k points for Flying Club Silver or Gold tier members based on status at the time of voucher redemption”. It’s nice to see that there is expanded use for elite members here.
The changes announced today appear to only affect flying on Virgin Atlantic-operated flights. Redeeming points for travel on Virgin Atlantic is often of questionable value even at today’s award pricing given the outlandish surcharges thar Virgin imposes on their own flights, which applies most egregiously to business class awards (though even in economy class you’ll pay significantly more via Virgin than when using points/miles in programs that do not impose surcharges on awards). Unless this move to dynamic pricing leads to Virgin dropping those surcharges, I doubt that dynamic pricing will make redemptions any more attractive for most readers despite the increase in award availability.
For those situations where you just need to find a seat and you don’t care how many points it costs, these changes will be better than the current status quo. But for those who prefer to redeem points for great value, it seems very likely that these changes will make the Virgin Atlantic program even less attractive than it is today.
Again, this doesn’t appear to apply to partner awards, so we expect those to continue to follow the partner award charts. Hopefully, Virgin will continue to leave those charts intact. Personally, I have award seats booked through Virgin Atlantic Flying Club for travel next year on Air France. Just yesterday, I considered changing plans and booking on a Star Alliance carrier where I found availability, but my hesitation was in being stuck with a large sum of Virgin points. The sheer number of devaluations we’ve seen in recent years and the lack of notice in most cases (while today’s announcement that comes a month in advance is better, it still isn’t nearly as much notice as one would like to receive) led me to settle on the fact that I don’t want to be stuck with a large pile of Virgin points for fear of further short-notice or no-notice changes that reduce opportunities for outsized value.
I do imagine that when these changes take effect a month from now, we’ll most likely see at least a short spurt of increased availability of the new “Saver” level awards, so if you have a lot of Virgin points, it might be worth taking a look for those awards to scoop them up while you can. Apart from that, look to Virgin Atlantic partner awards as the most likely place to receive excellent value for points moving forward.
H/T: One Mile at a Time
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