Should You Buys Velocity Points With A 100% Bonus?

It’s safe to say that during this pandemic, loyalty programs have been the saviour of many airlines. Simply put, you don’t need your customers to fly to make money! We’ve seen plenty of insane points sales from international airlines and Qantas has harnessed the power of its frequent flyer base to bring in substantial revenue and positive press as well.

Velocity Frequent Flyer, however, is a bit late to the party…

Today the frequent flyer program launched a 100% bonus sale on frequent flyer points. But why? Why now? If I may be honest, it seems a little too late, or is it?

The price is excellent; this deal would allow you to buy points and fly West to East (well, depending on whether you get Mark McGowan’s blessing that is!) for a ridiculously cheap $478.17 (taxes included) in business class. Even on a B737 with a healthy serving of 2-minute noodles; that’s a bargain!!

Economy? $236.67 taxes included, that’s cheap! This price was achieved by stacking the current 30% discount on economy redemptions which runs for a few more days.

The Deal – 100% Velocity Points Bonus

Ok so here’s the deal, buy any amount of points over 1,000 and up to 100,000 to get a 100% bonus. So you buy 1,000 Velocity Points, you will get an extra 1,000 on top. The deal ends on November 13, 2020, and you can buy a maximum of 100,000 points which would then yield you 200,000 points for a total cost of $2,340 including GST.

Price-wise, this isn’t bad at all; $0.0117 per point is the lowest we’ve ever seen, and if I had more confidence in Virgin Australia and Velocity I would be a buyer…

Devaluation in 3, 2, 1?

Let’s be honest here; whatever is going on at Virgin Australia 2.0 does not inspire confidence and trust. Even if Velocity is a separate entity, there’s no doubt in my mind that a devaluation could be on the cards. Maybe not right away, but once we have some sort of normality in the domestic travel market, it would come at no surprise. The new owners are on a cost-cutting spree and if there’s money to be made they will do it.

That said, devaluing Velocity might not be a good strategic move. I would say that the value of the program has pretty much halved since the takeover (that’s my personal valuation) since there’s no way to redeem your points for anything “aspirational”. Maybe this is the start of something great where Velocity moves into the frequent points sale cycle like Avianca, Alaska Mileage Plan and Aeroplan do so well? Selling points is a lucrative business for those that get it right!

Summing Up – Should you buy?

If you are planning a redemption, this deal could be a no brainer if you run the numbers. Speculatively buying Velocity; no way!

I’m interested to know, do you think this is a good deal?

You can access the Velocity Points sale here.