Virgin Australia carrier charges rising: How much difference does it make?
Charges for Business Reward Seats are going up.
Passengers looking to redeem Velocity Reward Seats on Virgin Australia are about to pay a little more.
From 8 January 2020, the carrier charges for many Virgin Australia redemptions are going up. Most Economy fares are seeing a rise, but it's the changes to Business Reward Seats that have caused the most chatter in frequent flyer communities.
Here's a full list of what's changing.
| Fare type | Old charge | New charge | % increase |
|---|---|---|---|
| Domestic Economy | $3.50 | $10.00 | 185.71% |
| Trans-Tasman Economy | $3.50 | $10.00 | 185.71% |
| Short-haul International Economy | $25.00 | $35.00 | 40.00% |
| Australia-Hong Kong Economy | $35.00 | $45.00 | 28.57% |
| Australia-Los Angeles Economy | $60.00 | $60.00 | 0.00% |
| Premium Economy International | $145.00 | $145.00 | 0.00% |
| Domestic Business | $5.50 | $10.00 | 81.82% |
| Trans-Tasman Business | $5.50 | $10.00 | 81.82% |
| Short-haul International Business | $50.00 | $70.00 | 40.00% |
| Australia-Hong Kong Business | $50.00 | $98.00 | 96.00% |
| Australia-Los Angeles Business | $230.00 | $230.00 | 0.00% |
The percentage increase for Economy is the highest, but in reality, it won't make much difference. If you're willing to pay $5.50 for a redemption, $10 is still not a big deal.
The real sting comes from the Australia-Hong Kong charge for Business flights, which has almost doubled, rising from $50 to $96. Business seats are a key goal for most points hoarders, but having to pay a higher carrier charge can be off-putting.
The change comes just a year after carrier charges for Reward Seats were first introduced. While they're annoying, they're also a fact of life for Australian travellers. Qantas levies similar charges, as do most airlines offering reward seats for points.
One bit of good news? The charges for Premium Economy stay the same, and charges for Australia-USA fares also aren't changing. That said, they were already high: a Business Rewards seat to Los Angeles costs $230 in carrier charges.
With all that said, the carrier charges don't make a massive difference to the value you're getting from your points. Let's look at Sydney to Hong Kong as an example. A one-way Business seat on that route typically costs around $3,200. If you pay with Velocity Points, you need 59,500 of them.
Before the change, the effective value you were getting from 1,000 Velocity Points from the redemption was $52.94. After the change, it's $52.16.
Yes, it's lower, but it's still very good value, and well above the $20 per 1,000 points minimum that I recommend.
The bottom line? Business class flights remain one of the best-value ways to use your points. Carrier charges are irritating, but don't let them annoy you into choosing a really low-value redemption like a toaster instead.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on Finder.
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