Your Virgin Australia Velocity points are about to lose their value

Your Virgin Australia Velocity points are about to lose their value

Singapore Airlines will cut the 'exchange rate' for converting Virgin Australia Velocity frequent flyer points into its own KrisFlyer miles, in a move which reduces the transfer value of Velocity points and weakens a key component of the reward scheme.

As of 1 January 2019, transferring Velocity points to KrisFlyer miles will take place at a rate of 1.55:1, compared to the current ratio of 1.35:1.

The devaluation means that come the new year, 100,000 Velocity points will be converted into 64,516 KrisFlyer miles rather than 74,074 KrisFlyer miles under the current rate.

Singapore Airlines, which holds a near-20% stake in Virgin Australia, says "the change in conversion rate reflects the differing reward program currencies within which each airline program operates and transacts."

The same reduced rate also applies to swapping KrisFlyer miles for Velocity points. "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," according to the KrisFlyer website.

A blow to Velocity's value proposition

The points-swap partnership was launched to much fanfare in 2014 and was said to mark the first time that two airlines had arranged for a direct transfer of points between their frequent flyer schemes.

Being able to convert Velocity points to KrisFlyer miles was widely considered to be one of the most appealing features of Virgin Australia's frequent flyer scheme. It opened the door on points-based award bookings and flight upgrades not only with Singapore Airlines but right across the Star Alliance with premium partners such as ANA, Lufthansa, Swiss and Thai Airways.

Likewise, it allowed business travellers flying with several different Star Alliance airlines to funnel their points into their Velocity account by firstly crediting each Star Alliance trip to KrisFlyer and then sweeping the combined points balance across to Velocity.

Savvy frequent flyers planning to swing their Virgin Australia points across to Singapore Airlines should consider doing so before the end of 2018 in order to maximise their KrisFlyer haul.

David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

29 comments

  • elchriss0

    elchriss0

    15 Oct, 2018 11:22 pm

    As Kevin Sorbo once said... DISAPPOINTED!!!!!!!
    No member give thanks

  • dylanmalloch

    dylanmalloch

    16 Oct, 2018 06:47 am

    I’m assuming you’ll still be able to book Singapore Airlines flights with velocity points via the VA website though?
    No member give thanks

  • Dmitry Abramov

    dimi

    16 Oct, 2018 08:06 am

    Likely, although I will not be surprised to see a devaluation of redemption rates soon.
    No member give thanks

  • RTWFF

    RTWFF

    16 Oct, 2018 07:09 am

    Has there been a credit card review specifically on accumulating KrisFlyer points recently? My NAB Velocity card is about to expire anyway
    No member give thanks

  • Uqsthom6

    Uqsthom6

    16 Oct, 2018 07:27 am

    So.. velocity points are less valuable to KrisFlyer miles. So why is the coversion factor from KrisFlyer to velocity still worse... seems like spin. More like SQ sick of people moving their velocity points for SQ upgrades
    No member give thanks

  • SilverBromide

    SilverBromide

    16 Oct, 2018 08:57 am

    "And shall we stoop to insult? No! No!"

    How much will Velocity elites be asked to bear? It seems this days that loyalty isn't really going both ways.

    No member give thanks

  • Dmitry Abramov

    dimi

    16 Oct, 2018 03:46 pm

    Oh my god! So much drama!
    Transfer your points to SQ, get a status match to Qantas or whatever, and move on!

    No member give thanks

  • elchriss0

    elchriss0

    17 Oct, 2018 08:17 am

    what does status have to do with anything??? Many people earn SQ/VA points through credit card churning to get the sign on bonuses. QF award availability for international flying is terrible and not everyone has status and their service is equally as bad. VA award availability for international is equally as bad, whereas SQ availability is way better, hence why the reduced value for conversion to SQ is a big deal for velocity and KF members.
    No member give thanks

  • Stm Aus

    stmaus

    17 Oct, 2018 08:45 am

    So you choose what is best for you (and for many, that remains VA despite this change). That's the free market. Dimi is right - the sky is not falling in and Velocity elites are not being asked to undergo compulsory root canal surgery.
    Member who gave thanks

    bl812

  • Alan Arratoon

    alan-aa1981

    17 Oct, 2018 04:11 pm

    Not at all. I am actually surprised that Singapore Airlines didn't buy into Velocity business, given how much more benefit that this would bring to SQ as a brand. More so, why not have a single FF program (i.e. Krisflyer) for both airlines?
    No member give thanks

  • Aleks Popovic

    SYDINI

    16 Oct, 2018 08:57 am

    Unless you’re flying on a non-VA points earning flight this is disappointing.
    No member give thanks

  • Vik Jay

    MarkivJ

    16 Oct, 2018 10:49 am

    Soon, they’ll be selling their 20% stake as well! Sign of things to come...
    Member who gave thanks

    Madicken

  • Dan

    DanV

    16 Oct, 2018 11:00 am

    Will this announcement may potentially increase the chances that SQ may possibly join HNA and EY in the rumour mill of selling their VA stake?

    Leaving only ANA and DL as the potential suitors.

    No member give thanks

  • Dean

    deanr

    16 Oct, 2018 11:52 am

    I don't think the sky is falling here. These kinds of deals tend to be signed for a certain number of years and then they come up for renewal and renegotiation.

    Let's be realistic, there are probably far more Velocity members converting to SQ than the other way around, given SQ's bigger scope of redemption partners. When a conversion to SQ takes place, Velocity would be buying miles from SQ, which costs them money. The big boss may have just decided they want a better margin on those transfers or wanted to encourage members to redeem their miles on flights through the Velocity program instead, which could be more profitable. At least they gave a few months notice!
    Member who gave thanks

    kylebb

  • elchriss0

    elchriss0

    16 Oct, 2018 01:43 pm

    "encourage members to redeem their miles on flights through the Velocity program instead"

    pfft yea right...how about actually offering some international redemption availability. Looking to book next august to LHR and velocity have availability maybe 1 day a week in each direction at best. Compare this to SQ which have multiple combinations options available everyday which allows me to choose the days and times that suit me.
    Member who gave thanks

    Sevae

  • Simulate Aero

    simulate

    27 Dec, 2018 03:15 pm

    Agreed. SQ almost always have availability when I want to travel. VA hardly have anything one week or 52 weeks out.
    No member give thanks

  • Blake

    Blake

    16 Oct, 2018 01:24 pm

    Krisflyer points also lost their value. Transfer rate from KF to VFF changes by exactly the same.

    Obviously its a mutual decision by both airlines to do this.
    No member give thanks

  • atreides

    atreides

    16 Oct, 2018 06:11 pm

    Time to jump this sinking ship. Either VA joins a real alliance or it's game over.
    No member give thanks

  • Martin  Slobodnik

    msport2012

    16 Oct, 2018 07:44 pm

    What are the chances of VA now seriously considering an alliance and/or pre hap's adding a new level above PLAT & doing Lifetime Status?
    No member give thanks

  • xtfer

    xtfer

    16 Oct, 2018 08:02 pm

    Unfortunately, it would appear we may have to wait till after Borghetti's departure at least. Another 18 months?
    No member give thanks

  • Dan

    DanV

    16 Oct, 2018 11:00 pm

    Little to none for VA joining an alliance, even after JB's departure. Even then, SkyTeam is VA's only alliance option available to them.

    The ship for VA joining *A has well and truly sailed thanks to the NZ breakup. Any attempts by VA or one of their stakeholders to join *A will just end in a veto by NZ and UA.
    I can't see any future owner pandering to NZ's alleged demands for VA to "give up all international flying" and feed their traffic to NZ. If DL is the party to purchase the EY and/or HNA stakes, you can nail the *A coffin shut for VA.

    If anything, if VA was to scale back int'l flying to mostly domestic, it would likely be under DL ownership with their only Int'l being NZ and the USA. With that, VA would likely get the nickname of "Delta Air Lines Australia", much like how Virgin Atlantic is nicknamed "Delta Air Lines UK".
    No member give thanks

  • Graham BLAMEX

    BLAMEX

    16 Oct, 2018 08:33 pm

    The only reason I did fly with VA was for the points accrued as a Platinum member and I transferred all points to SQ. This is not good news. I have now instructed our business to move all travel to QF for domestic. VA lounges are a bus shed, they do not value Platinum members, the domestic business class is very average compared to QF. VA are doing nothing to retain high value customers. This was the only key benefit being able to transfer VA points to SQ
    No member give thanks

  • Alan Arratoon

    alan-aa1981

    17 Oct, 2018 06:47 pm

    It is a shame, since they started to devalue their members. I honestly love VA and would only fly with them domestically, but when you think of having balances as high as 1 million plus in frequent flyer point terms, there is very little justification on continuing to accrue those points without substantial network support. VA have great alliance(s) with other airlines, however those benefits are not far reaching enough to justify staying them over a longer term.
    No member give thanks

  • BOF

    BOF

    17 Oct, 2018 03:52 pm

    The other side to this is that it seems to be increasingly difficult to acquire KF Miles from credit card spend. I stopped using my Westpac KF card after removal of the companion Amex left the Visa earning 0.5 miles/$. Moved to velocity which effectively earns 0.74 miles/$. This change now reduces to 0.64 miles/$.

    I suspect that the slow overall devaluation will continue.
    No member give thanks

  • Dave Thomas

    deethom

    17 Oct, 2018 05:04 pm

    Sure, the devaluation of points exchange seems a bit draconian to some, but in my case my wife and I use pooling to accumulate points, which helps our aggregate of points, and I cant’t see much difference in our situation.
    Our Amex cards also give us a 1 to 1 exchange with KF, with no expiry till transferred, so not much change in our case.
    No member give thanks

  • Russjking

    Russjking

    17 Oct, 2018 10:03 pm

    I'm happy with both VA and SQ. Both good companies, one for international and one for domestic. Suits me.
    PPS and Gold VA owner and happy with the benefits. Lounges are fine.
    No member give thanks

  • Daryl Horsfall

    4WDazza

    21 Oct, 2018 12:36 pm

    Has anyone calculated the points and status options of only using a KF membership on SQ code shares on VA metal for domestic flights?
    The SQ website says refer to partner airline but the Velocity information is focused on the reverse play of accruing Velocity points on VA codes shares on SQ metal.
    No member give thanks

  • martinmemo

    martinmemo

    27 Dec, 2018 08:47 pm

    Xferd today after my last VA points landed. Sadly, looks like the bonus for the spend with 5 partners will happen after Jan. That with a few generous flybuys promos which also havent landed will see me keeping some points in VA. No point rushing to xfer after devaluation. Will keep there for upgrades and awards and xfer only if I am low with SQ.
    No member give thanks

  • Andrew

    andyf

    29 Dec, 2018 10:09 pm

    I would transfer over everything ... except that SQ points expire while VA do not; and also from Australia to Europe VA also has options of VA/VS via Hong Kong, and Etihad via Abu Dubai, in addition to Singapore. Yes - there is better availability for SQ via Kris Flyer; but swings and roundabouts?
    No member give thanks

Guest

26 Mar, 2019 02:03 pm

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