Virgin Flying Club splitting from the airline to create a Virgin-wide loyalty scheme

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Virgin Group, Virgin Atlantic and Delta Airlines have announced their intention to launch a brand new pan-Virgin loyalty programme with reward opportunities across all Virgin brands.

You can find out more here on the Virgin Atlantic website.

Virgin Group Loyalty Company launched

This is a further attempt by Virgin Group to bring all of its brands closer together, something which has been challenging in the past because each business has separate ownership and different shareholders.  Virgin Trains, for example, is owned by Virgin Group and Stagecoach whilst Virgin Atlantic is owned by Delta, KLM, Air France and Virgin Group (now just 20%).  Virgin Money is a PLC although it is in the process of being taken over by the parent of Clydesdale Bank and Yorkshire Bank.

Back in 2015 Virgin Group launched Virgin Red, an app which lets users earn points and prizes through quizzes, challenges and reverse auctions. By ‘getting to know’ the user, the app enables relevant Virgin products to be promoted. Virgin Red will be integrated into the new company.

An interesting ownership structure

Virgin Group and Delta Air Lines have founded a new entity, Virgin Group Loyalty Company (VGLC), which will own and manage the new loyalty scheme.

What is interesting is that Virgin Atlantic is not a shareholder.  The airline has effectively sold its loyalty scheme to the new company, although it is not known if any money changed hands.  Some deal must have been done to keep KLM and Air France happy, as they presumably invested in Virgin Atlantic assuming they would also be owning a profitable loyalty programme.

In general, moves like this are often done when an airline is in serious financial trouble.  You may remember how Etihad bought the Air Berlin loyalty programme, topbonus, at an inflated price – this was a backdoor way of injecting money into the airline without breaking EU rules on foreign investment.  There is no indication that this is being done for the same reason.

Who is running Virgin Group Loyalty Company?

VGLC will be launched in 2019 and headed up by Andrew Swaffield.  Swaffield is the well regarded former CEO of Avios Group (he was replaced by Gavin Halliday, who left to run Etihad Guest and Etihad Holidays, and who was replaced by the current CEO Drew Crawley).  VGLC will hopefully be a happier job than the one he left Avios Group to do – become CEO of Monarch Airlines ……

Andrew Swaffield said about the new programme:

“Virgin is one of the most admired brands in the UK and across the world, serving 53 million customers each year across 60 companies. Customers expect to be rewarded for their loyalty to Virgin and we want to ensure Virgin customers get the very best rewards possible. Our ambition is to bring the Virgin companies together and combine their appeal to customers, working together to create a truly outstanding offer”

Virgin Atlantic has said that there will be no changes to Virgin Flying Club for now, and that in the future members will have an expanded range of ways to earn and spend miles via the new Virgin loyalty programme.

Oli Byers, SVP Global Sales and Customer Loyalty, Virgin Atlantic, said:

“Today Flying Club offers Virgin Atlantic’s customers compelling and valuable rewards for flying on Virgin Atlantic, Delta and a range of Flying Club partners. This will continue to be the case, but at the same time we’re excited to work collaboratively with Virgin Group to build a stronger loyalty programme and unleash the power of our shared brand to reward customers for their loyalty to Virgin. We’ll be giving customers more reasons to join Flying Club and fly with Virgin Atlantic and our airline partners.”

It is important to note that Virgin Flying Club miles will be the ‘currency’ of the new scheme.

My initial concern here is how the relationship between Flying Club and Virgin Atlantic will work.  As they will soon be totally separate companies, the airline will effectively be selling reward flights to the loyalty programme.  It is fair to say that Avios Group and BA already work like this, but at the end of the day both companies are owned by the same parent and should be pushing in the same direction.  That is not necessarily the case here.

My other worry is that Virgin Flying Club moves towards revenue-based redemption once it is legally separate from the airline.  After all, it is highly likely that all of the other redemption options with Virgin Trains, Virgin Active, Virgin Media etc will be revenue-based at around 0.5p per mile.

I am also intrigued as to why Delta Air Lines is a shareholder in Virgin Group Loyalty Company but Virgin Atlantic (49% Delta owned) is not.  It is worth noting that we do not know the exact split of ownership between Virgin Group and Delta.

It will also be interesting to see how the arrival in 2019 of KLM and Air France as Virgin Flying Club earning and redeeming partners is impacted by this.

With Virgin Group as a shareholder, I am confident that VGLC will be a success.  Virgin Group will be able to put pressure on Virgin-branded businesses to sign up, and it could become a contractual requirement for new partners.

We will keep you updated as we find out more …..

The Virgin Atlantic website has the full statement here.

(Want to earn more Virgin Flying Club miles?  Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)

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Comments

  1. I have not flown Virgin for a number of years mainly due to the BA 241 voucher where we use two a year flying BA.

    However, we have collected Virgin points taking up offers on cards over past four years and we currently hold around 250,000 Virgin Points. I was hoping that the KLM and Air France scheme would have been announced by now.

    Not sure what to do.

    • Can always transfer some over to Hilton/IHG if you dont want to use them on flights. You take a small hit on the conversion but at least you get some utility out of the redemptions.

  2. Does anyone have any thoughts as to how this may or may not impact on the suggested potential for redeeming on KLM/AF?
    Since this became a possibility my O/H and I have been stashing away FC miles rather than Avios as I was planning to run down the Avios pot and thought FC miles might become a bit more useful. I’d hate to see Flying Club ape the Delta system.

    • Lady London says:

      Problem also is that with Delta so much of this everything will be swamped by the wall of points and demand that is the Delta FF base. I can’t see UK users doing any good out of this.

      Can Virgin miles be transferred into anything useful other than hotel points? So far as Virgin is concerned, this news means I’m out and I just want to transfer my points for whatever I can get.

  3. Can we have an article and discussion on best value for using Virgin Flying Club Miles right now if one wants to use them up. I have 105,000.

    So far I use them to upgrade to PE.

    Also, what will happen to new VA credit cards?

  4. Anthony says:

    From long and bitter experience I don’t trust anything about the Virgin brand particularly where Beardy is fronting. This doesn’t feel like it’s going to benefit the frequent flying punter. I’ve used the VC at T3 but only as part of the Centurion card and am now an air tart and buy only on price and service. My wife has BA Gold and HH Diamond and is getting more unimpressed by the month. Switching to partners like Qatar and Finnair reduces cost to the business and gives, often more, Avios (that are increasingly difficult to redeem). Recent Qatar trip in business to Seychelles was infinitely superior to BA First. Roll on the Qatar sale!

  5. I have just redeemed and virtually cleared my VA Flying Club account in the last couple of weeks on a Delta flight from London to Portland in the last couple of weeks to visit friends – which is pretty much the only use I could find for them at reasonable cost. Unfortunately due to the lack of eastwards network which I tend to fly more, and the fact awards in UC have been made ridiculously expensive in miles I gave up on FC a long time ago.

    I am glad I cashed out as like many others I don’t see this development as anything but ominous. Let’s face it the redemptions on KLM / Air France were never going to be good and this development just solidifies my thoughts that FC as a scheme is going to get worse.

  6. darkwingduck says:

    The Virgin Group thing is getting rather confusing to me. Virgin is a brand, other companies pay to use the name. Trains is Stagecoach, airline is practically Delta with a Union Jack on it and the gyms are owned by a private South African firm. Yet still they are happy to peddle the belief that Richard Branson sits at the top table. At JFK a few weeks ago a Brit was ranting about luggage at check in and shouted at his mate to film him and post it on Twitter so he could send it to Richard Branson. Virgin are trying to build this model of loyalty yet with so many firms they have no idea who is loyal to who, other than verifying through the Virgin Red app (which gives you points to enter prize draws). So if I book a Virgin train from Manchester to London, they will have no idea if I have a gym membership or how many recent Virgin flights I have taken.

    • Will Avery says:

      One of the great ghost brands. Has their logo on everything but service delivery wildly different. Can you really compare Stagecoach to VA to Virgin Active. And VA another classic brand whereby customers are conned into thinking it will be a super duper Branson operation only to find it’s just another overpriced gym!

  7. loyaly is a failure these days. I am loyal to my bank and my own money.
    I pay where the best fares are for the best possible service/hard product I can buy.
    I credit miles and points to the best possible locations.
    if I have enough somewhere, I use them.
    If I dont I dont care as I have the best experience I can afford.
    eg – I will never fly BA J at a non deeply discounted fare just so that I can credit miels to alaska where I can get a lot more bang for mile + accelerated status and huge 50k bonus miles when hitting status targets.

    • For the same reasons as you stated, it doesn’t make sense to be loyal to a bank either…

  8. Mark Vreeswijk says:

    I have 2 Lloyds flight upgrade vouchers (in my name and wife’s) and 2 BA 2-1 vouchers (in my name) and I would like to end up with 4 business class seats to Johannesburg for the family (2 adults + 1 child + 1 infant). What is the cheapest strategy in terms of points?

    • I have the same situation, i use the 241 for myself and the 5 year old and the upgrade voucher for the wife. The upgrade voucher can easily be applied to any name online so could be in your name yet redeemed in your wife’s. Where as you cant redeem the 241 in someone else’s name, unless you use 2x 241 in your name and you are travelling, and in your case the infant cant use the second part of the 241.

      • The Streets says:

        I tried this to apply the upgrade voucher to another name online and Avios wouldn’t process it for me

        • Upgrade vouchers don’t work online anymore it literally breaks their website now.

  9. Colin JE says:

    Virgin will have to put its house in order to make this scheme work. Here’s a warning if you are applying for the Virgin Atlantic Mastercard. My wife got an offer in the post with extra miles if you spend over a certain amount for the first few months. For the Reward+ card, in addition to 15k miles on the first purchase, the offer said you get: ” – 6,000 miles a month in your first 3 months, when you spend a minimum of £1,000 each month.” I’d already had the Reward+ card for a month so when I called them they said the offer would apply to me too even though I’d not spent enough, I upped my spending. But the offer is misleading. It turns out that you have to spend £1k in each and every month after the card is issued, otherwise you get nothing! Calls to Virgin Money CS have been equally misleading, with the first agent saying I’d still be eligible even though I’d missed the target in my first full statement month, then the second agent said it was based on calendar months and I should get payment in September, then her supervisor told me I’d not get anything. He kindly (!) offered to escalate it as a complaint, as CS couldn’t award points. We’ll see.

    • Neil Spellings says:

      Not sure why you felt you were mislead..the small print in the email offering you the bonus points clearly state there are three “qualifying periods”; the first beginning June 18th and lasting until your next full statement period. The next two periods are based on your next two statement periods. There is no mention of calendar months so the agent you spoke to was incorrect. There is also no mention of having to reach the spending limit in every period, so if you missed the bonus in the first one, you should still get the bonus miles from the second and third. Note that the miles seem to be posted a month in arrears, so I doubt many will have actually received them yet.

      • Roberto says:

        The 18th of june was an example date. Its of no relevance except if your first billing cycle started on the 18th of June.

        Its not relevent to every body. You need to spend the £1000 ( or what ever your target is ) durring your first 3 billing cycles to qualify for the bonuses.. simples

        • Actually, just realised that I have messed up now. I applied for my wife and the card would have arrived on Saturday. Unfortunately we’re not back home for 2 weeks. This means the first £1500 will need to be done in a 2 week period …

      • Jon Arnold says:

        Here’s the t&cs concerning the offer; https://uk.virginmoney.com/virgin/credit-cards/vaa-cards/flying-club/terms/

        I’ve met the spend required in the 1st period and received my statement with no mention of the 6000 bonus miles. It seems they add it to the next statement (clause 4) so let’s hope…..

    • As Neil says, the periods were very clearly described in the fine print. I’m in the similar position that I got the card before receiving the promo email, so hoping they can retroactively apply the offer to me. Have sent them a secure msg about it but havent heard back yet.

      • Memesweeper says:

        Count yourselves lucky to get the damn card! I’ve applied, declined, appealed and declined again. Every other lender sends me plastic at the drop of a hat… but this is the card and these are the points I want!

    • It’s going to be statement periods not Calender months

  10. I haven’t signed up to Virgin Red. Do you have an invite code, Rob? It promises both extra points if I use one.

  11. Slightly OT: Did anyone get the 10,000 points from a Virgin life insurance policy yet? Im referring to the offer on the 21st of June, I was accepted but no direct debits have been taken yet…

    • I’ve had 2 direct debits taken already. I assume the points after 6 months or something like that (those were the original rules if I recall correctly). I’d be worried about no direct debits if I were you, though. Call them!

    • I have not received my points but two payments taken so far – July and Aug.
      I believe the offer stated 6 payments and then points are paid 60 days later so not expecting the points until Feb 2019.

  12. The Original Nick says:

    Slightly OT, I’m trying to link up my girlfriends Amex MR points transfer to the VS account. There’s 10 digits showing as her VS account. Do I need to add zero’s in front to add her account to her Amex account to be able to transfer and be verified?

    • Peter K says:

      Ring Amex customer services and they can sort it. Not sure if that helps if your girlfriend won’t at least chat to give permission to talk to you though.

  13. The virgin red app gives you chances to win Virgin miles if nothing else.
    50 bonus points (for you and me) if you add the code UXWFNR. To do this click the picture of yourself top right, then the settings wheel top left and choose ‘invite friends’.

  14. Colin JE says:

    It turns out that the Virgin Atlantic Rewards+ card must be the most generous intro offer out there. The complaints team came back to me within a couple of days and they are applying a first qualifying period that is even more generous than the example in their Ts&Cs: 18 June – 17 August i.e. the first two statement periods and about 7 weeks after actually receiving the card. Rob, you should find you’re okay. It turns out that the CS staff’s knowledge of how this offer works is a bit mixed. My first CS agent said I’d missed the first qualifying period (wrong) but would be ok for the next two (right). The second said I’d met it in the first period but I’d have to wait a month before I got the miles (correct), but I was in my third period (wrong), then her supervisor said I’d have to spend the full amount every month, which I’d missed the first month so I could not qualify at all (completely wrong). The complaints team have written to me to confirm how the scheme works and what I’ll get (and have given me £50 for my trouble). Seeing as it means I’ll get another 18k miles so long as I spend enough for the next 2 months I’m a happy bunny.
    Moral: If you think the bonus rules aren’t being implemented right it’s worth complaining. And the T&C page is quite right.

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