Virgin Is Launching A Mysterious Loyalty Program

It’s a strange time in the history of loyalty programs. Earlier today it was announced that Air Canada is buying Aeroplan. First Air Canada spun off their loyalty program, then they decided to not renew their contract, and then they outright bought the program.

But that might not even be the weirdest loyalty program news, as I think Delta and Virgin take the cake for that.

It has just been announced that a new Virgin-wide loyalty program will be created in 2019, and it will be owned by the Virgin Group and… Delta?!

What we know about Virgin’s new loyalty program

Okay, to be honest, there aren’t actually that many details as of now. Here’s how this new program is described:

Today we’re announcing the intention for the Virgin Group and Virgin Atlantic to launch a new Virgin-wide loyalty programme, with unique and differentiated reward opportunities, to reward customer loyalty across Virgin branded companies. This new loyalty programme will offer members the chance to earn and spend ‘miles’, the currency of Virgin Atlantic’s frequent flyer programme, across a range of products and services.

What’s interesting is that a new company will be created for this — Virgin Group Loyalty Company — and it will be owned by Virgin Group and Delta Air Lines.

It sounds like Virgin Atlantic Flying Club is sticking around as Virgin Atlantic’s frequent flyer program, and miles will continue to be used as the currency. Virgin Atlantic says that Flying Club members can look forward to “an expanded range of valuable ways to earn and spend miles.”

That’s all we officially know as of now, and all we can do otherwise is read between the lines.

Virgin is essentially launching their own “Avios” currency

While many of you outside the UK may be familiar with British Airways Avios, Avios as a currency goes way beyond that.

Avios is not only the currency for British Airways, Iberia, and Aer Lingus, but it’s also a “generic” currency that has all kinds of partners, so you can earn Avios for everything ranging from supermarket purchases to online shopping.

Virgin isn’t even being subtle about the fact that they’re trying to recreate the Avios program. The CEO of the new company will be Andrew Swaffield, and he’s the CEO of Avios.

The ownership structure is interesting

While the exact details of the ownership structure haven’t yet been revealed, it has been revealed that the new company will be owned by Virgin Group and Delta Air Lines.

Virgin Atlantic is owned 49% by Delta, 31% by Air-France KLM, and 20% by Virgin Group.

I do find it curious that Virgin Atlantic as such doesn’t have any direct stake in this company. Sure, two of the companies that have stakes in the airline own the new company, but that’s still an important distinction.

If the number of Flying Club miles being issued greatly increases, what does that mean for the value of Virgin Atlantic miles? Furthermore, Delta is involved, so that can’t be good news for the value proposition of the loyalty program.

Bottom line

It seems like Virgin is trying to launch a competitor to the Avios program, which doesn’t seem unreasonable as such. What I’m most curious about is how this program develops given the ownership structure, and what exactly Delta is hoping to get out of this.

What do you make of Virgin’s new loyalty program?

Comments

  1. I’m guessing it’ll also include the virgin hotel properties in San Francisco and Chicago?
    As for Delta skymiles, I’m beginning to like them more especially their award sales (sure it’s in economy but they’re such good deals compared to redeeming AAdvantage or mileageplus miles for the same routes in economy.)

  2. I don’t think this will really bother those of you in the US.

    Those of us in the UK will probably be looking to cash out sooner rather than later – it doesn’t bode well. Btw Flying Club already lets you earn miles from supermarket spend and through a virtually identical shopping portal to the one BA has – and has done this for many years. I suppose we will end up all going to Japan for the sake of it.

  3. What I’m hoping from this is getting ANA premium cabin from flying delta, and a program where I can partner both domestic japan and delta flights to (since delta does not partner with a Japanese carrier). but it seems like it’s not the case.

  4. Dan said:
    > Bye bye 120k ANA F redemptions

    Yes. This exactly. I just redeemed mine for 2 F R/T LAX -> NRT in December, and even transferred more with the 30% Amex bonus in hopes of a future redemption.

    I’m hoping to get something out of my remaining balance before the VA miles turns into a tire fire.

  5. I was wondering how much of a game changer this will be in practice. As already mentioned, Virgin Atlantic already has its own shopping portal and various ways to earn miles. It’s expansion into financial services beyond credit cards has been particularly interesting – including the savings account that pays Virgin miles rather than interest in cash.

  6. Lucky,

    You said it – Delta is involved so this loyalty programme (the English spelling 😉 ) is going down. Your other readers have also correctly spotted that the ANA deal will go.

    It is time to give up my Virgin Atlantic Flying Club Gold status, which I have held since 2007, in favour of Emirates, although that will also have its shortcomings! If I needed a nudge to take the decision, Virgin and Delta have just delivered it.

  7. Anybody noticing a trend here? Delta has ridiculous Skymiles redemption rates. FlyingBlue goes down the same road. Korean disappears as an Ultimate Rewards partner not long after the JV with Delta to Seoul is approved – and this after years of Delta shafting flyers who flew Korean and tried crediting to Skymiles. I suspect a massive Skypass devaluation is imminent. Now it’s Virgin’s turn.

    It seems more than obvious to me that Delta is throwing its weight around to ensure that there are absolutely no truly valuable redemptions to be had in its own program or those of its closest partners. I can’t imagine that Aeromexico is far behind, though it’s program isn’t all that great to begin with.

  8. It’s called Branson Rewards. Earn 5 Richard miles for every $1 spent on Virgins’ flight.
    For only 7 million Richard miles you can redeem a seat on Virgin Galactic First Class.
    Limited time introduction, if you apply for the Unobtainium Virgin’s Branson Reserve Charge Card and spend $7,500,000 in your first billing cycle you will receive a free 2 night stay certificate at Necker Island with Sir Richard himself.

  9. I can’t wait for the day when I can convert 5 million MR points into SkyPesos, then swap those for Virginios, and cash in for a one-way, off-peak economy flight from SYD-MEL!

  10. I have had Virgin Atlantic miles for many years now. Unable to use them because of their draconian restrictions on when and where you can use them to fly to. This new programme will just make it worse for us “clients’. Another way to stop you from using miles on their flights.

  11. Andrew is actually the ‘last but two’ CEO of Avios.

    I spoke with him today. It is a bit complex, but Delta’s involvement is partly due to ease of separation – VA is still 51/49 ownership so making VGLC 51/49 between Virgin Group and Delta makes the split simple. Air France KLM has approved this even though their purchase of a 31% stake in VA is not yet complete.

    Flying Club stays with the airline, the miles move to VGLC, in the same way that BAEC belongs to BA but your Avios are owned by Avios Group Ltd.

  12. Good question Morgan! As you probably know there has been intense speculation over Virgin Australia’s next moves with its FF alliances. With the Air NZ ‘divorce’ and Etihad cutbacks, it’s hard to say. VA’s service in Australia and transPacific, plus with Singapore Airlines, is excellent but its alliances in other regions are unusual!

  13. Janet, I vaguely recall a guide on OMAAT a few months ago about using Virgin Australia points redemptions for V-Atlantic. Are you saying you can’t find anything going the other way?

  14. Actually, for a UK person, that’s good news. Some competition against Avios can only be good, I think.

  15. Man, the comments on here are outright brutal. I was hoping that a combined loyalty program might make it easier for us Americans to earn Virgin miles, but I guess that’s not going to happen. Oh well.

  16. @ Janet – I have redeemed Virgin Australia Velocity points for travel on Virgin Atlantic multiple times.

    @ Jamie – Velocity points are the currency of Virgin Australia. I would be surprised if Velocity was folded into this Virgin group currency and would expect them to remain a separate currency.

  17. I have ordinary, or first leg of virgin FF , bit Diamond for Virgin, The reason, Ive kept with delta, is of course that ,at the moment Virgin are not in the ,Sky Team, So if i fly Delta./ KLM etc, ST members, I get points for my Delta account, not so for virgin members, or the did,nt, If IK fly virgin, again, I get sky miles,The difficulty is, at the moment, to get a Global upgrade, its done via Delta, 24 hours before the flight, and Virgoin , sometimes, only release the Global upgrade3 ,yes 24 hours before,i did get last week, global upgrade, very nice it was.thank you, yesterday I tried for my wife, using one of mine, but , you have to be traveling, together, plus in the same booking.I spoke to Virgin today, and the information , is very little at the moment, over the new program, so wait and learn.I believe, the joint venture is getting better, with the two members, and also KLM have a share in Virgin,sme as Delta have share in KLM.AF, so in fact Delta ons the company, Also feel that Craig ? the virgin Boss, doing a great job, asa well as the staff, ps my wife got upgrade, free to Premium economy, as they changed her seat 3 times, due to equipment change, diff planes, thx craig

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