When they launched their airline and the associate elevate loyalty program Virgin America didn’t actually have any redemption options, just a promise that there would be some in the future. That has finally changed, with the unveiling of flight rewards now available for booking using points as the payment.
The points are earned at a rate of five points per dollar spent, excluding taxes and fees. And the redemption is based on a similar cash basis for buying tickets – 2.15 cents each. And the redemption can be done for any flight with a revenue seat available since the points have a set cash value. There isn’t a cash+points option yet so those F rewards are a bit out of reach for most folks who do not have $10,000 in spend on the airline yet, but they are out there.
From a straight value play the 10% yield on the points isn’t horrible. On the plus side, there are plenty of shorter, cheaper runs that can be redeemed for as few as 2279 points (a 449 fare), or about $455 in spend to earn those points. The more expensive rewards, however, have a much higher cost (48,558 points minimum, which is about a $10,000 spend, for a one way F transcon redemption), making them a pretty poor value.
As a top-tier elite in the Continental program I’ve spent less than the $455 to earn over 20,000 miles, getting me very close to a domestic round-trip ticket. Of course, I had to deal with inventory limitations, but I’ve usually worked around those pretty well. And as the programs scale up to the more valuable reward the cost do not slide up in the traditional programs the way they do with elevate. A round trip ticket to Europe in business class is generally 80-100K points in a traditional program. For a dollar value redemption calculation those seats range from $2,000 when on a good sale to much more. Earning sufficient points for such a trip in a legacy program will cost some money, but not nearly as much as the Virgin America program would cost.
The value of the redemptions looks great when you see that the points are worth over two cents each, but when you consider the cost of earning them the luster starts to rub off pretty quickly. Still, it is good news for folks who have been collecting the points. At least now they know what the points are worth, even if it is not much.
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