Air France KLM buys 31% of Virgin Atlantic – and you can redeem Flying Club miles on them

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• Chris says:

  28 Jul28 July 07:06

  I’m afraid that I really don’t subscribe to the idea that this “can only be good news”. I think this is bad news for consumers generally, both in terms of the effect it will have on cash fares and the effect it will have on FFPs (Flying Club in particular).

  As to cash fares, this will leave the transatlantic market ex-UK (whether direct or connecting via AMS or CDG – i.e. two of the main continental hubs) totally dominated by the two JVs – BA/AA/IB/EI and now VS/DL/AF/KL/AZ. No longer (presumably) will we see cheap ex-UK fares on AF connecting via CDG – those flightless will, in all likelihood, be priced at the JV-standard ex-UK price. More generally, there are not may times in history that price collusion has led to price reduction!

  As to Flying Club, think about it. Sure, FC members may be able to redeem on a few more airlines. But good luck redeeming on VS (esp for Upper Class) with the vast number of Flying Blue members who will presumably now also be able to do so. I don’t know, but assume that Flying Club members are very significantly outweighed by Flying Blue members? On top of that, Delta, who have driven the cutting of frequent flyer programmes in the US market, will now have a very strong say in the future of Flying Blue and de facto control of Flying Club. Will that herald the introduction of revenue-based schemes, which so far have been much slower to take off here than in the US?

  • Clive says:

    28 Jul28 July 07:17

    We might see Norwegian flourish at LGW if prices increase?

    • JamesB says:

      28 Jul28 July 07:24

      I think their ambitions reach far beyond Gatwick.

      • Clive says:

        28 Jul28 July 07:29

        We’re talking about competition in flying from London. Do you have some LHR slots for them? 🙂

        • JamesB says:

          28 Jul28 July 07:40

          No, but Flybe might in early 2020.

        • Andrew says:

          28 Jul28 July 09:54

          I’d rather Flybe kept the slots!

          The Q400s aren’t the quietest or most luxurious aircraft in the world and the bussing to stand at LHR is a pest…

          But for the convenient connection to NCP’s “Flightpath” car park, reliability, 2+2 seating and the swift exit and boarding at Edinburgh – they are my airline of choice for my monthly domestic.

        • JamesB says:

          28 Jul28 July 12:43

          Not forgetting that if the plan is to ‘sell’ them or change destinations then it is loss of capqcity and frequency to EDI and ABZ.

  • Ro says:

    28 Jul28 July 08:21

    Couldn’t agree more Chris.
    All joint ventures do for the consumer is reduce competition and drive up prices.

    as for VS joining SkyTeam… it’s more likely, but joining alliances really is out of fashion. Have there been any big additions in the last 5 or so years except for Air India and Star Alliance?
    There seems to be much more of a preference for unilateral ventures.

    • James A says:

      28 Jul28 July 09:03

      Qatar immediately springs to mind.

      • Ro says:

        28 Jul28 July 10:38

        nice, forgot how recent that was

      • Leo says:

        28 Jul28 July 10:47

        Sri Lankan to Oneworld 3 years ago?

    • Ro says:

      28 Jul28 July 10:43

      and by unilateral i obviously mean bilateral haha…

    • HAM76 says:

      28 Jul28 July 20:07

      airberlin in 2012

• JamesB says:

  28 Jul28 July 07:36

  I believe the primary driver of this change is AF/KLM attempting to insure themselves against potential negative implications of brexit. Other airlines also seem to be taking steps at the moment to position themselves to operate smoothly across the UK and rEU whatever the outcone. As for joint ventures, I wish they would deny it and scrap the others.

  • Clive says:

    28 Jul28 July 08:23

    Easyjet set up an entity in Europe to be able to fly within the EU, but that won’t enable them to fly between the UK and EU unless there is a new aviation deal. As Michael O’Leary pointed out, there are no WTO rules to fall back on in the event of a hard Brexit. So this move would at best only help AFKLM fly within the UK (if it represented them setting up a company base here, which it isn’t really), and I’m not sure they have any interest in domestic UK flights.
    It’s at least as likely to be Delta wanting to take over VAA at a knock down post-Brexit price. They could not buy any more shares and own 49%. The entity they took further control through had to be an EU airline to comply with ownership laws (majority EU ownership) and there probably aren’t many left which have the scale to buy a third of VAA.

  • Callum says:

    28 Jul28 July 11:37

    In what way does this insulate AF/KLM from Brexit at all?

    • JamesB says:

      28 Jul28 July 12:49

      I’ve no idea, just a guess. Reports of late suggest that many copanies appear to be restructuring as a result. At the very leasr brexit appears to be a factor in the Virgin Group sale, or at least is being presented as such.

      • Callum says:

        28 Jul28 July 20:33

        Oh, why do you believe its the primary driver then?

        Companies restructure all the time, I cant see a single post-brexit benefit to AF/KLM if they own just under a third of VS.

        • JamesB says:

          28 Jul28 July 21:34

          That’s because you have no idea either.

• the real harry1 says:

  28 Jul28 July 07:43

  ex-EU might get a whole lot more fun during sales – eg KLM Amsterdam-London-Las Vegas Virgin on one PNR

  • JamesB says:

    28 Jul28 July 07:57

    I don’t know about west-bound but KL exUK flights to Asia are £1500-1600 most of the time and earn enough miles for a flight in Europe so I see litgle point in exEU hassle unless one wants a short break too.

• Mark WIlson says:

  28 Jul28 July 07:59

  Hi Rob,
  27 years as a member of Virgin Freeway/Flying Club. Into my 9th consecutive year out of the 10 required to qualify for Flying Club Gold status for life.
  Retaining this level has already become tougher, with the changes made to earning requirements. In addition, it has become increasingly difficult to actually find Upper Class reward seats.
  Do you think it is worth pursuing the magic 10 years, or do you believe that the programme will be swallowed up by Flying Blue/Delta Sky miles?

  • Rob says:

    28 Jul28 July 09:11

    BMI lifetime Golds will tell you how much BA respected that.

    But ….90% there. I would go for it.

    • Mark WIlson says:

      28 Jul28 July 11:59

      Ha….yes I remember those great BMI days, with fantastically easy qualification to Gold, and great redemptions. I ended up trading for BA Gold and kept it for 18 months after BMI folded.

• the real harry1 says:

  28 Jul28 July 08:03

  just had a look on https://www.airfrance.co.uk/ and KLM’s site to see how they connect to our place in the sun

  you can change in Paris/ Amsterdam and get here in under 2 hrs worse than a direct flight

  opens up quite a few possibilities if the points are not too awful (for 2 flights) compared to 7500 Avios (peak, 1-way)

  typically about another 7 realistic (ie short) flight options a day

  • the real harry1 says:

    28 Jul28 July 08:07

    KLM goes from Bristol as well – just got my 2 hours back 🙂

    • the real harry1 says:

      28 Jul28 July 08:37

      here’s the miles calculator https://www.flyingblue.com/calculator.html

      looks like it would be 12,500 miles from Bristol (same from LHR) – not sure about any fees [‘The airport and security taxes still need to be paid separately.’]

      so compared to 7,500 Avios, pretty poor – but could give great flexibility

      • JamesB says:

        28 Jul28 July 08:55

        You can have a stopover in Amsterdam or Paris if you like.

      • Wally1976 says:

        28 Jul28 July 09:18

        Unfortunately unless they introduce an RFS equivalent I would’ve thought fees would be quite high (hope to be proven wrong).

        • Owen Rudge says:

          28 Jul28 July 10:39

          They’re not actually as bad as they used to be, I’ve found. I think they dropped fuel surcharges on redemptions (at least short-haul European), but will still charge full airport taxes. So avoid flying out of Heathrow…

        • Owen Rudge says:

          28 Jul28 July 10:40

          Certainly compared with flying, say, ABZ – LHR – x (which now costs twice the miles and twice the RFS surcharge), ABZ – CDG – x or ABZ – AMS – x is typically a similar amount of miles and a similar tax charge.

  • Leo says:

    28 Jul28 July 08:19

    I don’t this is on anyone else’s agenda.

    • the real harry1 says:

      28 Jul28 July 08:26

      what? using Virgin miles on European flights?

      there must be plenty of people with 100,000 Virgin miles like me who would prefer there to be European redemption possibilities as opposed to leaving the ever-accumulating miles stuck useless in the bank

      • Leo says:

        28 Jul28 July 08:39

        No – your holiday plans.

      • pauldb says:

        28 Jul28 July 08:46

        It would make a difference to me too: I’m happy to accumulate avios knowing that if I don’t have any longhaul plans (or don’t earn enough) I can get good value to Europe. Since that’s not true with virgin don’t tend to bother.
        But unfortunately I’m not optimistic: comparing other partners I guess a short flight will be 8k or 12.5k and a connecting flight necessary through AMS/PAR will be double: poor value.

      • JamesB says:

        28 Jul28 July 09:01

        The point Harry is that many of those many may be able to fly via AMS or CDG from the regions to visit you in the sun for 12500 which beats 7500+7500 via LHR with BA so stock up on those cases, we are coming to see you soon…paradise lost 🙂

        • the real harry1 says:

          28 Jul28 July 09:20

          good point – from bonny Scotland for example it’s going to be cheaper (not sure what fees Flying Blue charges on redemptions since I’m not a member – maybe somebody who is could do a quick check on https://www.flyingblue.com/calculator.html to see how European flights pan out?)

        • AVM says:

          28 Jul28 July 11:36

          Or if you want to visit me in the sunny place in Russia flying Aeroflot using AF miles is 12500 miles +60eur vs 13000-14500 miles +22GBP with BA/S7 one way. However, if you fly from that place back to the UK, then it is 12500 miles +0 eur , which is cheaper than BA/S7 both miles and fees wise.

        • pauldb says:

          28 Jul28 July 13:32

          Are you predicting though that a VS redemption on AF/KL will be priced the same as a Flying Blue redemption – why? Every other VS partner redemption is priced leg by leg, like BA, so I don’t think 12.5k VS will get you beyond AMS/CDG.

        • the real harry1 says:

          28 Jul28 July 13:52

          just the hunch that FB will lead on points redemptions in Europe, since they will be the provider of the flights/ aircraft

          hard not to envisage a [mostly] joined-up reward flights program getting devised

          12,500 FB miles gets you both legs on the way out + taxes – we’ll just be using Virgin miles instead of FB miles

          or that is the hope!

• Alan says:

  28 Jul28 July 08:08

  I am not a member of Flying Blue (or the Air France alternative) so I’m not sure how their redemption scheme works. Does it have charge caps for short haul flights (like BAEC)? If so, then this should open up a lot of short haul options, if not, then I can only see this as bad news for Virgin Flying Club. Redemptions will be even harder to come by and the risk of further devaluation is much higher, which would be really annoying as my wife and I have been busy collecting the Virgin miles for a 2019 trip.

  • Mikeact says:

    28 Jul28 July 08:30

    Generally speaking, you can’t beat Avios for short haul European trips. Whereas, we wouldn’t usually use KL/AF as you have to connect through Amsterdam or Paris. We have only done this a few times to take advantage of their monthly ‘Promos’, with 25/50% redemption discounts. We have found the ‘charges’ reasonable in most cases. ps The Air France First offering is, in my opinion, an excellent product, compared to KL, World Business Class, which is ‘OK’. As long as they get my there safely then I’m really not that bothered.

    • JamesB says:

      28 Jul28 July 08:51

      You can beat avios easily, particularly if you live outside the south east, they are called easyjet, ryanair, vuelling, SAS, KLM etc.

      • Mikeact says:

        28 Jul28 July 09:11

        I thought we were talking of redemptions…perhaps I misread.

        • JamesB says:

          28 Jul28 July 09:53

          Yes, but what’s the point of a redemption if you can get a revenue fare for less than the cost of miles, taxes and fees? For me it used to be flexibility but with availability all but gone on major destinations at T-3tt that no longer applies.

        • Mikeact says:

          28 Jul28 July 10:19

          OK, I’ll ‘ll meet you in Tenerife next month…. I’ll be on my £35 Avios redemption, with my 23kg suitcase, and you ?

        • Genghis says:

          28 Jul28 July 11:00

          @Mikeact Do your avios not have a cost (or opportunity cost)?

        • Mikeact says:

          28 Jul28 July 11:21

          Of course, but Lego for the kids etc., makes it a no brainer.

        • JamesB says:

          28 Jul28 July 11:22

          But when did you book it Mike, is there any availability if you want to change it, is your travel insurance going to pay out for lost avios if it goes messy? It would cost me twice as much from EDO and why would I want the hassle and stress of changing in LHR when I could be approaching the runway in Tenerife? I have not checked a bag since 1995, I prefer just to use a local laundry service or pay up at hotel.

        • Mikeact says:

          28 Jul28 July 13:50

          Booked last night. Two one ways, LGW, August 17th @£17.50 each. (We always book one ways for the flexibility in the event of cancellations) We’re fortunate enough to look at the return home while out there…haven’t been let down yet, but then, there’s always a first time I guess.
          Regarding insurance of ‘lost airmiles/points’ I’ve only had one experience and that was having to cancel a KL journey out of LGW to connect in AMS on our way out to Cape Town, my wife was taken to hospital from the airport around six years ago….a bolt out of the blue. After much deliberation the insurance company, with KL input, negotiated a fair settlement and in return KL returned the long haul part back, but not the hop accross to AMS. I accept that coming from EDI is not comparing like with like out of London, but even so, i would still argue that comparing apples with apples, Avios v the rest is still generally a better bet @ £35 , or it is for me. As far as the cost of Avios, I have to buy fuel ,shop..on line or actual etc. Four months touring AUS and NZ earlier this year, netted me over 45k Avios through Booking.com , when they were offering 8 per £.

      • JamesB says:

        28 Jul28 July 20:18

        @Mikeact, good stuff and good luck 🙂 I wasn’t trying to be so prescriptive, rather I was trying to highlight a number of factors that may or may not come into play. Everybody has different combinations of itineraries and opportunitities ard we all have to work them out on a trip by trip basis. I’ve learned the hard way that miles are not always the best way so I now always start by finding my cheapest acceptable revenue fare and then comparing it to miles options to ascertain whether the latter provide real value of not.

        • Briandt says:

          28 Jul28 July 20:48

          Fair do’s !

        • JamesB says:

          29 Jul29 July 09:11

          No criticism was intended, Mikeact got a good deal a month before peak season that meets his needs. If avios are going to be bought I cannot see much better ways than getting Lego for his kids.

        • Alan says:

          29 Jul29 July 17:46

          Yes I must say I did a lot of BA RFS flights previously – including some great ones like a weekend in Luxembourg then stopping off in London on the way home for a course for a couple of days 🙂 Sadly with the doubling in RFS cost for those of us having to connect in London the economics significantly shift away from RFS. In many cases an LCC direct from EDI (with lounge access either end via PP and paying for priority boarding/extra legroom seat) works out cheaper, even with a fairly low Avios valuation. Minimum cost for a return via LON is now 9k+9k & £35+£35 (obviously higher if going further afield). It clearly depends on how you value Avios but I think most would say this means your cost with RFS is going to be at least >£200, this buys you a lot of ticket with an LCC…

• Clive says:

  28 Jul28 July 08:13

  It was interesting that in Branson’s statement he said that Brexit and the fall in the pound had been a problem for Virgin holidays and flights- I wonder how much bookings are down, how much of a problem it had become (or is projected to become), and if he has sold out under much pressure.
  (Also interesting to note that the Chicago tourist board was advertising holidays in the cinema the other day – the £/$ drop combined with Trump might have made Virgin’s US focus a big weakness if tourism has fallen drastically?)

  • JamesB says:

    28 Jul28 July 08:46

    It works both ways though, tourism from USA-UK should havd increased due to low pound but the combined effects of brexit and security incidents probably offset any benefits.

• Mikeact says:

  28 Jul28 July 08:18

  Bit of a lone voice here probably…..but I have generally been pretty happy with the KL Flying Blue scheme, which of course goes back to Northwest , Flying Dutchman etc. years ago. Redemptions have usually been easy to get hold of, but I accept that being a top tier, lifetime member for years has also helped in a big way. (Last big redemption, short notice Business seats to Australia) For me, and being a bit selfish, it will be disappointing if these moves degrade the FB program, putting significant pressure on redemptions. When formally available, I will try to obtain Business Virgin seats to the US, but from what I’ve heard, and read, I won’t hold my breath, unless my current tier membership will somehow open up extra seats.

  • Keith says:

    29 Jul29 July 16:58

    I’ll second your lone voice 🙂
    I’ve been on FB since about 2003, a couple of years as gold, and a few silver. I redeemed about 200k points for 2×5 fights (2 in business) around SE Asia on Vietnam Airlines last year. Availability was excellent, all booked online with minimum fuss. The taxes and fees were about €50 on the longer business flights, and €3.40 (yes the decimal point is in the right place!) on the shorter economy ones.
    I’ve been thinking hard about turning my efforts back to earning on FB, or *A in preference to being tied into BA with the current downward slide.

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