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Apparently timed to coincide with the Global Business Travel Association’s (GBTA) Business Travel Convention at the Boston Convention Center this week, both JetBlue and Virgin America have announced the addition of elite tiers and perks to their loyalty programs.
For now, here’s a review of Virgin America’s entry.
Elevate Goes for the Silver and Gold
Beginning on August 8 (JetBlue’s fifth anniversary), members of Virgin America’s Elevate program can earn elite status and perks. Silver status is earned after completing 20,000 elite-qualifying points (EQPs) during a calendar year; Gold status is earned after 50,000 EQPs.
EQPs are awarded for flights on Virgin America, Virgin Atlantic, and Virgin Australia. As many as 10,000 EQPs per year may also be earned after charging at least $25,000 on the Virgin America Visa Signature Card.
Elite perks are as follows:
On August 8, all Elevate members who have already qualified based on EQPs earned during the year thus far will be auto-enrolled in Silver or Gold and receive the associated perks until February 2014. Other Elevate members who have demonstrated strong loyalty beyond the bounds of the current year will also receive immediate status.
According to Phil Seward, Director of Guest Loyalty at Virgin America, the airline expects that around 2 percent of Elevate’s 2.5 million members will achieve elite status. That’s a significantly lower percentage than the elite tiers of the legacy airlines, which can approach 10 percent. And it should bode well for Elevate elite members’ chances of receiving upgrades to Main Cabin Select.
I asked Seward whether Virgin America would engage in status matching — the common practice of offering elite members of other programs equivalent status in another program. He left the door open with this response: &quot;Not at launch, but we do recognize the barriers to switching…&quot;
The Ultimate Flight Award
If the addition of elite perks weren’t newsworthy enough, the airline is throwing in a kicker with the launch: The Elevate member who earns the most EQPs between August 8, 2012, and August 7, 2013, will earn &quot;the ultimate round-trip flight reward&quot;: a sub-orbital space flight on Virgin Galactic.
The price for a ticket on a Virgin Galactic flight: $200,000.
Business Travelers, the Line Starts Here
The new elite tiers and perks are clearly designed to increase Virgin America’s share of the business-travel market, much as JetBlue’s new elite offering is.
And it will certainly give business travelers a compelling reason to give Virgin America a second look.
But the airline is hobbled by two drawbacks that can’t be overcome by the latest enhancements.
First, it operates a very small first-class cabin, just eight seats per flight. The decision not to give out complimentary elite upgrades to first class makes sense in view of that limitation, but it may give road warriors pause.
Second is the nature of the program itself. As a revenue-based scheme, with relatively fixed point values, Elevate can boast simplicity and ready availability of awards. But there’s a downside as well. The opportunity to leverage the program to get outsized value from frequent flyer points disappears.
I plan to circle back in a year or so and ask Mr. Seward how successful the elite initiatives have been in upping the airline’s share of business travelers. But based on similar queries to other airlines, I can already anticipate the response: &quot;Everything’s going great, but we can’t share any specifics. That’s considered competitively sensitive.&quot;
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