Virgin loyalty program
 

Just came across this story when browing News.com.au

The link is http://www.finance.news.com.au/story...from=ni_header for those of you who are interested...

Quote:
"The big push is going to be for the business market and we've got a frequent flyer program ... which will, I think, knock Qantas's frequent flyer program into touch," he said in Sydney.

"Qantas's frequent flyer program is not very popular so I think it's a very opportune time for us to come in there and hopefully we can do to the business market what we've done to the economy class market."

Asked if the scheme would give free flights for a number of paid journeys, Sir Richard said: "I think it might be a bit more interesting than that but we'll see. I've asked not to be drawn on it today but I'm sure some of the other Virgin companies will also be involved ... Virgin Credit Card and Virgin Atlantic."


What do you guys think is going to be involved??? Any suggetions?

PS: Is a new Virgin forum going to start on flyertalk once the plans for Virgin FF is released? LOL

Im sure that I recall Virign stating that they have no interest in such programs a couple of years ago, in order to offer their lo fares.

Maybe so, but a couple of years ago Death* didn't exist and DJ was still growing. Unless they can attract the business traveller with a FF program they're going to show us (again) how to create a small business.

Surely this is the key to DJ continued success - dont worry about Blue Plus fares or whatever they recently launched - they need suits and the way to get them would be FF program and even consider joining (gasp) *A and get the flow on from incoming SQ, UA, NZ pax

Don't get me wrong, I would like such a program (although not all that keen on DJ).

I think if they teamed up with Virgin Credit and offered a similar rewards program like ANZ have with QF, it could prove very popular (due to Virgin Credit with their "no annual fee ever" approach).

Well times change. :cool:

Chris Corrigan now owns more than 50% of DJ and he has been strongly on the record they MUST have one, and fast.

By Xmas, I'll bet the house. If not sooner.

As I've posted many times before all they need to do is like SouthWest in the USA (easily most profitable airline in the USA) and offer a free flight for each 10 paid flights.

Simple, attractive, and incredibly easy and cheap to track and maintain and understand. ^ ^

Inventory they capacity control, so effective cost - near ZERO. Extra bookings - a LOT.



Glen

FlyerTalk 'Oz Fest #2' in Sydney May 27/29, 2005. Click for details

Not a bad option, very similar to the REX program. Still, I think something with Virign Credit would be more attractive towards both the business market, while still gaining some private market share.

From today's paper - the plan it seems to me is WELL progressed from this snippet.

==================

http://www.theaustralian.news.com.au...E29098,00.html


Branson's Aussie space plan
Steve Creedy, Aviation writer
April 04, 2005

Sir Richard also indicated Virgin Blue would move soon on its long-awaited frequent-flyer program, saying the scheme would be part of a renewed assault on Qantas now that Patrick Corp's takeover bid had expired.

Asked how Patrick's 62 per cent stake would affect the airline, Sir Richard said he believed it would be "business as usual" and that it had not affected his relationship with Patrick chief executive Chris Corrigan. The Virgin boss and his son are in Australia to film cameo appearances as astronauts in the new Superman movie, which features a Virgin Galactic spaceship.

As bran-e mentioned before, not a bad idea. However, let's look at it this way.....

- Person A travels on mainly 'Happy Hour' or 'Sale Fare' between MEL-SYD-MEL 5 time a year. Total costs: approx $600 ($118X5 based on Happy Hour fares).

- Person B on the other hand, travels for business on the above mentioned route and frequency BUT on he 'Blue Plus' or 'Flexi Saver'. Total costs approx $2300 ($229X2X5 based on 'Blue Plus' fares).

It seems to me that perhaps that Person A would be the greater benefitor of this FF scheme if is based on the 'fly-10-get-1-free' idea. Naturally, I know that companies might pay for business travels (Person B) and the ultimate benefitor would be Person B him/herself anyway, but from this perspective, it would be odd from DJ's view in terms of revenue/profit that they could generate.

Just my 2 cents.

Maybe it could be a rebate on virgin credit card as a percentage of the amount of $$$ you've paid for virgin flights...then that would be fair as people who travel for business who usually purchase more expensive tickets for its flexibility will get more back at a rebate or maybe a virgin blue $$ voucher...but these are just my thoughts

NEVER, EVER forget that 99.99% of the average travelling public are not as savvy as FT'ers. :)

Folks here get to QF Platinum with cunning SC runs that no-one else except a FT'er would ever dream off etc. And at about 10-20% of the cost most other Plats expend I bet.

Guess what awards Qantas mostly redeems?

MEL-SYD
SYD-BNE

Only a brain dead moom would use QF miles for those - IMHO - but they do.

And so it would be with DJ. The travelling public in general do not have a clue. :rolleyes:

Accurate summation the "average" (whatever average means) travelling public. However, whilst average corporate FFer's are not as savvy as FT'ers either, they are certainly more aware of where to get value out of a FF program than average public. And any worthwhile airline could probably do with the odd corporate customer here and there. I'd say very few of my colleagues would book MEL-SYD awards, and many have at least a vague idea about what status means and how to get it.

Even my relatives who fly very infrequently (but have credit cards) seem to know how to get value out of points (I might add without asking me first!) My parents, knew enough to pay for flights MEL-CNS last year, and use their points to go MEL-PER-PBO. Another relative, who has probably flown no more than 10 times in his life, redeemed point for his wife to go to KIX in Japan - quite a good redemption given the fares at the time.

Correct me if I'm wrong and maybe I've missed something here. Don't Virgin Blue have only one class of travel ? Also, from what I've heard their lounges are not in the same class as the QP's. :p

Reading forums on FT, a large percentage of the discussion on FF programs and status in them is about either:

1. Upgrades
2. Lounge Access

If you can't offer either (to a competitive standard), I fail to see how it will knock the socks off QFF.

A *A partner in Australia would be nice and I'm sure there is a possibility to link the Virgin credit card to the scheme as well but how far can they really take it without upgrades and decent lounges ?

I've said it before but I'll say it again.

DJ will not be a Star member.

The closest they could get is Regional Member.

They can't offer all the products expected for a Sta member - multiple class service, lounges, frequent flyer points, status recognition etc etc.

Also don't forget you don't just join up for nothing - there's a considerable cost to joining Star, and then it continues with things like CRS links and the like. Even getting UA codes on some DJ flights was a bit of a major thing because they do NOT have direct links to eachother.

Now, DJ could do things like offer free Blue Room entry for FF elites, and free* upgrades to Blue Zone seats (bulkhead+exit row seats) for same, or perhaps preferred seating... but that's about it.

Having FF programs with points and stuff to track is a cost and we know the QP style lounge is a huge cost that I imagine DJ isn't ready to get into (Patrick or No).

What is perhaps more likely, I reckon, is tie ups with other Virgin Brands like:

- $xx spend on your virgin credit card can get you a $yy travel voucher for DJ
- similar deals with virgin mobiles

It wouldn't be inconcieveable that DJ would team up with a budget hotel chain to offer some kind of discounted rates deal - perhaps they already do (I don't know).

Given that Sir Richard has mentioned VS in the equation - and we know that DJ can't hope to compete with QFF because DJ only has a small international network (NZ, pacific islands) I can imagine some kind of credit system being available for use on VS..

I guess whatever happens it will be interesting to see what they come up with..

Everything else you say is entirely valid, but is multiple class service a pre-requisite (for domestic travel?) The example that springs to mind is NZ, which have no J class domestically any more (OK, OK, I suppose they have few if any domestic flights over 90 mins anyway).

While it's true you don't NEED more than one class I think it is important. This is why I suggested a Regional Membership might make more sense (consider Blue1 as an example). Of course, it still leaves a dilema where to feed your premium customers too - I believe most carriers have agreements with QF to stick those customers in J (say you arrive at SYD from a OZ flight and you want to get to ADL or PER and you're in F... do you really want to go to row 13 on DJ when you can get row 2 on QF and a corresponding level of service?).

All I am trying to say is that it's not just any one thing that's a showstopper, but I think all of them together make it a problematic option for now - unless Patrick really changes the way DJ does business (remember, they are competing with JQ at the 7-8 cent CASM level right now - you add in lounges, FF programs, etc etc.. that CASM goes way up, and JQ wins that particular battle...).

QF on the other hand has been smart with JQ - they offer QFF points and SC's on the highly inflated JetFlex (full) fare tix which the business folks buy anyway and they make a massive margin on, and they can bear the costs of those FF perks in the parent company, so it may not even have a noticable affect on CASM.

I doubt DJ can easily match that one.

I can imagine DJ would be forgine close ties with many foreign airlines (UA is a start) that don't want to be in bed with QF. SQ is the obvious choice here - while they fly to all major AU cities on their own, they can always use that feed from tassie and to/from such places as OOL, CNS, ASP & DRW plus regionals. Given the Virgin investment/stake in SQ this would also have nice synergy. However that would essentially also compete with VS on SYD-LHR so that's a point against (why give to SQ when you can funnel everyone to VS at SYD and later MEL?).

Interesting times ahead.
Still.. interesting times ahead here.

The "Buy 10 get 1 Free" offer would appeal to Biz folks for sure.

A LOT of folks are forced to fly DJ due to cost, and are not happy that there are zero perks in that.

Give them a few 'free' flights for their year of sitting in coach, to cart Mum and the kids off to Cairns with at holiday time, and they'd be FAR happier campers. IMHO. :)

Glen

FlyerTalk 'Oz Fest #2' in Sydney May 27/29, 2005. Click for details

Hey, careful Oz .... I resemble that remark (you should see my semi-optimised itinerary for next trip).
In that case I am not a brain dead moom :cool: . I would not even use point for a BNE-PER-BNE for Mrs NM. Paid for N and then used points to upgrade to J. I am sure that little gem earned me more points (in my other scheme) than it cost me in QF FF points :D .

Maybe I'm looking too hard, or not hard enough, but if the Southwest idea came here, wouldn't it cause an FBT problem? If you were travelling on business to get the free flight, wouldn't you have to role the free flight back into the company, or pay FBT on it? Surely a free flight is a lot easier to calculate a cost on than miles from a taxman point of view?

Ther ONLY reason flyer bennies are not tax adjusted is that poliiticans and bureaucrats would be equally as liable as us, so it will never happen here. IMHO. The same way it does not happen in the USA.

Same way your free Starwood or Hilton nights are not taxed. Two or 3 paid hotel stays gives you a free night in many plans, and they are never taxed.

It is a "Loyalty" reward for good customers. Like a free Gloria Jean coffee for evet 10 purchased, which is also not taxed. :cool:

Glen

FlyerTalk 'Oz Fest #2' in Sydney May 27/29, 2005. Click for details

Actually, they do not capacity control. They do have blackout dates, but that's it. To quote from their website: "Rapid Rewards is the only major frequent flyer program that doesn't limit the number of seats available for use with your roundtrip Award. If a seat is available on the flight you want to take, it's yours! Best of all, Southwest Airlines has limited blackout dates so there are virtually no limitations on when you can use your roundtrip Award - imagine the possibilities! "

Deleted. Should have read some later posts before composing my reply.....

But really...is a free coffee from Gloria Jeans a reward? I think oil sludge has a better flavour. :D

Well Starwood also have exactly the same terms, but trust me you can often book a room and not get an award room at a Sheraton for same night. :)

And black-out dates are of course in essence a capacity control - i.e. NO flights!

But yes, Southwest have a simple system all the same, and one the AVERAGE person can understand and follow. And guess what - Southwest is capitalised at more than the COMBINED market value of UA, AA, CO, DL and NW combined. The simple approach often is best for everyone.

And with no airline partners and complications accosiated with that, admin for such an award scheme is a tiny % of what other airlines need to pay.

I think a simple and fair "one for ten" would be a huge winner for Virgin.

Glen

FlyerTalk 'Oz Fest #2' in Sydney May 27/29, 2005. Click for details

This afternoon I was invited to participate in a survey that was very clearly aimed at working out the details for a Virgin Blue frequent flyer program. Specifically, the survey asked about:

• Whether it would be better to earn points (like on QF) or airline dollars (like NZ)
• Preferred graphical design of a DJ Visa card
• Whether I would pay a percentage of points to ensure that points are not lost forever in the case of program termination (ie an Ansett guarantee)
• How price sensitive I am on flights that earn points
• It mentioned retail partners, but made no mention at all of airline partners.

Interesting times ahead I believe.

Steve

There is once again speculation that there may be a formal DJ FF program by december however they are hinting they will only do it if they can be totally revolutionary and have no desire to follow existing models so I think we can forget something too similar to QF, NZ or even Rex (of course they could just launch a clone of an existing program an PR it as unique and revolutionary - wouldn't be the first time a virgin company did that!).

In the mean time there is still one (non credit card related) way to earn and redeem point on & for Virgin Blue flights, see http://www.flyertalk.com/forum/showthread.php?t=456929

Like this article:

http://www.thecouriermail.news.com.a...5E3122,00.html

" VIRGIN Blue would bring a "game change" to frequent flying if it decided to introduce a loyalty program, chief executive Brett Godfrey said."

and

"Virgin Blue hoped that by Christmas it would be in a position to make an announcement."

They could always offer a FF program that offered 'enhanced' benefits.

Some element of their thinking may come from the following quote

Virgin really have missed the boat on this one.

If they had SOME kind of scheme up and running soon after Death Star commenced they'd have creamed them.

I imagine they have lost about 3-5% of market share by not having SOMETHING to offer frequent travellers. Huge bucks.

They are in a unique position to offer Virgin miles for use or purchase of Virgin music, credit card and phone plans etc, so not having miles as a carrot has cost those business arms as well.

*clap clap*

I'm in HK and received a brochure from Virgin-Atlantic as part of an industry body magazine I receive. It said in small type that Virgin Blue would participate in Virgin-Atlantic's flying club later in the year.

I can't remember the exact wording, and I've thrown out the brochure now, but I remember thinking that the wording implied that Flying Club would be Virgin Blue's frequent flyer program.

VF Fan Eagerly Awaiting Here
 

This would be great news as the Virgin Awards are a much better value since Qantas murdered us with the increases this year.
Not to mention the dreaded assisted booking fee. :td:
It would be awesome to have a new way to earn when flying in
Domestic Au ^ Come on Richard! Nowwwww :-: :-: :-:

I am now enrolled in The Virgin Program as a result of those increases
and earning in ways I never could with the Qantas program. ^

Hilton hotel stays give 1000 VF miles worth double that of Qantas
Sprint allows US members to earn VF miles.
80,000 miles gets Upper Class to London anywhere from the US they fly.
Virgin Blue would be the icing on the cake.

Hertz and Avis Car rentals earn 1k on VF for as a little as a 1 day car rental
Hyatt 50 k gold passport points earns 29k Qantas points but 50k Hyatt points equals 35k VF miles ^
Making it worth 70,000 Qantas points in comparison. Then if that isn't good enough the lower redemption levels too boot.
Virgin Rocks ^
They even had availability from LHR to SYD in Upper Class for the few dates I looked into next year.
Qantas still had none in biz or first with the increases :rolleyes:
I owe much to Qantas for their increases.
It made me walk away from giving them my tens of thousands in revenue needlessly.
It all goes to other One World partners and VF now......
I'm sure they don't miss me a bit ;)

I would go as far as to say 70% of the users on the qantas forum are looking for a solid reason to leave QF if only another global airline would step up to the plate. Another 10% are locked into contracts (although not enforcable by law in AU) , and the other 20% think they have built up too much rapport with Qantas (status credits etc) or are too comfortable with how QF operates to change.

I could go on for hours about this topic but it wouldn't achieve anything beyond cutting some deep wounds.

This would make sense. Joining an existing scheme would be smewhat cheaper than starting your own up. Virgin-Blue have made it pretty obvious that whatever they do it will be involving their sister brands.

I doubt that Virgin Blue will share Virgin Atlantic's FF program. More likely, the Virgin Atlantic reference related to a code share relationship like the one already in place between Virgin Blue and United.

Other reasons I think it is unlikely:

*Virgin Atlantic's program is geared for long distance sectors, Virgin Blues would need to be related to short segments.
*Ownership - the companies do not have the same ownership. Virgin Atlantic is half owned by Singapore Air, while Virgin Blue is half owned by Virgin Atlantic - this would require Virgin Blue to buy miles from Virgin Atlantic and then Virgin Atlantic to buy seats from Virgin Blue - lots of overhead and potential liability.
*Virgin Atlantic's program is geared to be competitive with UK and US programs while Virgin Blue's Program needs only to be competitive with Qantas and Air New Zealand.
*Virgin Blue likes to portray itself as an innovator and frankly there is nothing innovative about Virgin Atlantic's FF prog.

That all said it would be nice if there had been a unified FF program for some time for Virgin Atlantic, Virgin Express, Virgin Blue, Pacific Blue, Virgin Nigeria etc and it would be nice if they created a merged program going forward (or better yet drop the plethora of brands and just have a unified Virgin Airlines brand covering them all) but I won't hold my breath (ownership is probably the biggest issue).

:( :( :( Hope this is not the case

I am holding out hope simply because everything I read says that Mr.Branson wants to fly more planes in and out of LHR,Hong Kong and Sydney and other major destinations.
Putting every thing under one umbrella makes perfect sense and creates less brand confusion.It also gives the opportunity for Virgin to compete as one global brand.
Rather then the current split the divisions and regional brands up.
By not merging they give giant Alliances like Star and One World a better platform to keep market share.IMO this would let Virgin go after more of the fully engaged One World/Star Crowd (self Included)
I would throw my elite status out the window not to deal with Qantas at all and their anti customer policies.
And that is saying it politely.

Mr Branson wants a lot of things but in reality doesn't get them that often - in the end he is a master of self promotion but not necessarily of running companies. The fact that the virgin group only owns one Virgin company 100% (Virgin Rail which nobody in their right mind would want to buy) means that in many cases Branson does not have ultimate say in the companies after the initial launch period.

With the Virgin branded airlines the ownership is:

Virgin Atlantic - Virgin Group 51% Singapore Airlines 49%
Virgin Blue - Virgin Group 25% Patrick Corporation 62.42%
Virgin Nigeria - Virgin Atlantic 49% Local Investors 51%
Virgin Express - Virgin Group 0% DAT Air Group 100%

Virgin Sun (a european holiday charter airline) failed several years ago and Virgin Express has essentially failed as well and will likely cease to exist as a Virgin branded company. Virgin USA if it launches will be limited to 49% non-US ownership so the Virgin Group will never be the majority shareholder.

Branson actually is pretty clever in putting the Virgin brand on many companies worldwide - gives the impression that they are all subsidiaries of the same corporation which isn't really the case at all.

Virgin Blue is pretty unlikely to adopt a common FF prog with Virgin Atlantic (or Virgin Nigeria, Virgin USA for that matter for all the reasons mentioned before) - beyond anything else, if Virgin Nigeria hasn't adopted it (and it offers longhaul service in 3 classes) I don't see Virgin Blue's current model working with it (nor do I see Patrick paying for it).

For the record I also think that Virgin Blue has peddled a lot of hype and in my experience have not lived up to most of it - their customer service is really pretty poor - especially if you want more than 'fun' interactions. I think if they do introduce a FF program many of the people who feel that QF is difficult will find their main problems were with FF redemption and that DJ is just as bad, if not worse. Any DJ FF prog is likely to be copied from LCC progs like Southwest etc - possibly with a high award tie in with Virgin Atlantic (similar to AirTrans other carrier awards) & possibly Singapore Air (of course DJ will proclaim it is a revolutionary program - yada yada yada but I doubt it will be that different).

Each of the Virgin airlines was established to fill a niche and while Ansett's death expanded DJ's possibilities I just don't see enough similarity. DJ set up the blue rooms to compete with QF (and sells access), while Virgin Atlantic only lets premium pax use its club lounges (a copy of BA).

I will be pleasantly suprised if I am wrong but I doubt it.

Oh - for the record, I am a shareholder in both DJ and QF.

This gets juicier now with the takeover bid by Toll for Patrick saying they want to sell off the stake, or most of it, in DJ and that Virgin Group may well end up with a meaty controlling interest. This could change the dynamics. I wonder also if SQ (remember part owners of VS) may also come to the party on this one despite saying they had no interest in DJ recently.

Although as I watch the few DJ shares I still have dwindle in value I wonder :D

I can't imagine for a moment that DJ will adopt the Virgin UK scheme. FWIW.

A far simpler system is more likely, such as the Southwest one I mention above - 1 free flight per 10 paid etc.

Cost to DJ is then near nil for all awards as all awards are capacity controlled on part empty flights.

I rented a car this week from Euro cars and they had a sign there saying anyone who rented in July and August and showed a DJ ticket would get free entry passes to the Virgin Blue Rooms.

We had QF tickets, but as always, I cheekily asked if girl could swing us a couple, but said she needed to add the DJ flights numbers to computer to generate them, but it was a nice offer. ^

Agreed that capacity control seems to be the key to making the FF program - any FF program - not just work but be profitable. In that regard, note that Southwest has just moved the goalposts on its Rapid Rewards program:

"Beginning February 10, 2006, all Awards issued will have no systemwide blackout dates and will be subject to seat restrictions. Restricting the number of seats for Awards helps us maintain our low-fare leadership and keeps the program lucrative for you.

Please plan ahead when making your flight reservations as certain holiday or peak travel periods will be in high demand and your desired flight may not be available for Award travel."

Interesting that AFAIK the only US airline that offered redemption on the basis that if there's an empty seat it's yours can no longer sustain that model. Presumably they looked at increasing the redemption cost in credits (which would have the same effect of reducing the overall number of award seats redeemed) and decided that controlling the inventory would earn them more in paying customers.