Singapore KrisFlyer & Virgin Australia Velocity Worsen Points Transfer Ratio

Singapore Airlines owns a roughly 20% stake in Virgin Australia (the airline has an unusual ownership structure, as it’s part owned by Etihad, Hainan, Singapore, and more), and the airlines have had a partnership for quite a while.

In 2014, the two airlines even introduced a rather innovative frequent flyer program benefit. With this, they allowed members to transfer points between Singapore Airlines KrisFlyer and Virgin Australia Velocity.

Unfortunately the transfer ratio wasn’t 1:1, though that’s to be expected, since KrisFlyer miles are more valuable than Velocity points. The ratio wasn’t bad, though, and was certainly much better than any opportunity you’d have to transfer points otherwise.

While other airlines let you redeem miles for travel on a partner airline, it’s exceedingly rare to allow points transfers between airline frequent flyer programs at a reasonable ratio.

With this partnership, you can convert 1.35 Velocity points into one KrisFlyer mile, or 1.35 KrisFlyer miles into one Velocity point.


Virgin Australia’s 777 business class

This ratio will be cut. As of January 1, 2019, points will convert at a 1.55:1 ratio, rather than a 1.35:1 ratio.

This change isn’t a sign of any change in their partnership occurring, but rather “the change in conversion rate reflects the differing reward program currencies within which each airline program operates and transacts.”

With this partnership, the better value is most definitely converting Velocity points into KrisFlyer miles, given that KrisFlyer miles are significantly more valuable than Velocity points. Singapore Airlines for the most part only releases longhaul premium cabin award space to members of their own frequent flyer program, so if you want to redeem for Singapore’s excellent first and business class products, KrisFlyer is the currency you want.

So I’d say this change is more a blow to the value of Velocity points than a blow to the value of KrisFlyer miles, since I can’t imagine many circumstances under which it would make sense to convert KrisFlyer miles to Velocity.

KrisFlyer miles have mostly maintained their value, while Velocity miles have become less valuable over time (especially with Virgin Australia’s lack of longhaul business class award availability), so I’m not surprised to see this reduction in the transfer ratio.


Singapore Airlines’ A380 business class

Has anyone taken advantage of the ability to convert Velocity points into KrisFlyer miles, or vice versa?

(Tip of the hat to AusBT)

Comments

  1. So, starting Jan. 1, you can convert 60k Marriott points to 25k Virgin Velocity miels, and then transfer those to Singapore to end up with 38,750 KrisFlyer miles?

  2. There are sweet spots to be had for both Velocity->KrisFlyer conversions and vice-versa.

    For example, recently I converted a significant amount of Velocity points to KrisFlyer miles to book 2 Business Class tickets from Sydney to Vancouver.

    A particular quirk of the Australian market you may not be familiar with Lucky is the excessive premium Business Class cabins command over Economy compared to the US (and even Europe). Spending 30,000 Velocity points to upgrade from Economy to Business on Virgin’s trans-continental service on their A330 is definitely worth doing, and a decent conversion to consider if you’ve been crediting Star Alliance flights to KrisFlyer.

    The change here is likely somewhat related to the lower income both Velocity and Qantas Frequent Flyer are suffering due to the ignorant fools who continue to alter payment instrument rules in Australia with zero justification other than their protectionist ideology.

  3. @Daniel – no. The ratio is the same both ways and always has been.

    You’ll lose a number of points/miles regardless of which way you transfer.

  4. @ UA

    Yes, there is an extraordinary level of protectionism in the Australian financial industry, which I only fully realised when researching the feasibility of a “fintech” start up business.

    For practical purposes with respect to credit, as a consumer I simply now favour my Amex cards as a work around.

    @ Lucky

    I have experience transferring points both ways between SQ and VA.

    Generally, yes, you would transfer from VA to SQ because:

    1. You can access SQ reward inventory not bookable through partner FF schemes (i.e. VA)
    2. You open up your VA points to the reward opportunities of all Star Alliance airlines, which is significant given the limited airline partners in the VA FF scheme

    I have transferred from SQ to VA in some more niche situations, for example, needing some VA top up points for a reward on HX (Hong Kong Airlines) which was flying from Cairns to Hong Kong at the time: the 53,000 point one way business redemption with top up being better value than having to fly south to BNE or SYD or MEL or SYD to get to HKG (with the CX alternative being unavailable on QF / AA/ or AS points).

    The impact / significance of such a change in ratio probably would be mostly relevant to Australian based members since they have the basic choice to make, each with its own upside and downside, namely:

    1. Favour QF as airline of choice (some domestic business lounges, redeem for OneWorld and Emirates, regular double status promotions, but pay fuel surcharges, etc)
    2. Favour VA as airline of choice (easy to earn points and status credits, feature of family pooling of points and credits, lounge access via Amex cards, regular double points promotions, but limited burn unless you travel domestically or transfer to SQ)
    3. Play a mixed strategy (build up to lifetime gold on QF and easily maintain gold on VA and then the preferred route / fare / aircraft, etc., on the day)

    The conversion to SQ is a significant point of differentiation or VA. Eroding that value is potentially eroding one of the most significant features of the VA Velocity scheme.

    Points on VA are earned on revenue spend with up to 10 pts / AUD on DOMESTIC flights (for Platinum member): earn about 6,000 points on VA for a business class one way and only 3,200 on QF. Earn 17,500 points for a (AUD2000) one business class CNS-PER on VA as a Gold member, but only 4,950 on QF. The points differential recurs with cost of fare and lower status level to be smiler for a traveller on a discount economy with no status. The schemes are broadly similar for international travel earn.

    So…VA wins hands down for domestic frequent flyers with any status.

    VA currently has a double points (on base points) promotion so a Platinum flyer would be earning 15 pts / AUD (AUD5 based plus AUD5 bonus plus AUD5 for status), which blows the maths out of the water in favour of VA.

    (BUT QF is currently running double status, which will be very attractive to QF devotees).

    So the earn rates on VA mean that small change in the conversion rate to SQ may not be in itself a major loss – the problem comes in the erosive effects of multiple small steps of devaluation.

    It is not that long ago that SQ devalued its own scheme so the conversion rate was effectively only recently devalued by default. Similarly, (per @ UA’s comment) I can no longer turbo charge my SQ points directly through Visa Prestige which used to earn a 5 pt / dollar on foreign currency transactions and offer 1:2 con version to SQ (not 1:.5). So effectively four devaluations in a couple of years.

    SQ is also significant in having good award space for its own members and does not apply fuel surcharges to its rewards.
    ]
    Even after the conversion, the redemption rates trump QF (I just redeemed two first class LHR-SIN-MEL in Suites for 148k pts each, which would have been well over 200k pts on QF with an estimated AUD1000 plus in full surcharges).

    So in conclusion, not a deal breaking change in conversion, but an erosion of arguably one of the most significant features of VA Velocity and something that could trash their scheme if the deviations continue…

  5. I think you got it the other way around. The conversion sucks to KF points and it’s even worse now. I don’t get it as you said, KF miles worth more. According to SQ’s website – “Receive 1 Velocity Point for every 1.35 KrisFlyer miles converted before 1 January 2019. After 1 January 2019, you will receive 1 Velocity Point for every 1.55 KrisFlyer miles converted, and Velocity Points will be credited directly to your Velocity Frequent Flyer account from then. A minimum of 5,000 KrisFlyer miles is required for each conversion. Please note that all miles converted cannot be reversed.”

  6. VA have just killed off the only really valuable differentiator in their frequent flyer program vs Qantas. I suspect many Velocity members will now shift their travel back to Qantas.

  7. This is disappointing, also another reason to shop a Woolworths and not coles, even if coles bonus point offers are better.

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