Oli Byers is Virgin Atlantic’s Senior Vice President of Revenue Management and Customer Loyalty.
Oli Byers is Virgin Atlantic’s Senior Vice President of Revenue Management and Customer Loyalty. Business Traveller spoke to him about the changes to Virgin Atlantic’s Flying Club Programme. The details of those changes are here
So is this a partial move towards a revenue-based programme?
“The short answer is yes. We haven’t gone all the way to launching a revenue-based programme, but we do want to reflect that loyalty should be more aligned to spend rather than the number of sectors that someone flies. So yes, we’ve deliberately made changes to reflect the revenue value of the ticket.”
Why did you decide to change?
“If you look at the difference between the cheapest fare and the most expensive fare we offer, and then look at the equivalent number of miles you could earn on those tickets, the difference between the two, the ratio, used to be three to one and it is now more like eight to one. So the changes have made the programme more rewarding for those who are spending more on their tickets.
The main driver for the changes has come not from wanting to become a more revenue-aligned programme, it was for getting a programme that works better for long haul flyers. We looked at it and felt it didn’t do enough for those who fly solely long haul, so this is what we have executed.
Do miles still expire after three years?
We still have a system where the miles expire after three years, but that’s only if you have had no activity with us including credit card spend. Historically if you were a silver member and you reverted back to red you got a new number. Now there is one number assigned to each member no matter what tier the member is.
Why are you increasing the tier points by 25 times?
For existing tier points we are increasing them by 25 is to make them consistent with the new tier points. The new tier point values and thresholds are so that in the future we have the option of introducing the ability for people to be able to earn tier points in other ways. The historic rates were two points in economy and up to six points in upper class, and that didn’t give us the flexibility to allow you to earn tier points in other ways. So today we are not announcing new ways of earning tier points, but we want to have that option. Currently if you are a U.S based customers you can get tier points on the credit card or flying with Delta on one of our tickets you can earn through Flying Club on that. It was quite a low valued currency for tier points. Having a larger currency from 25 points up to 200 in Upper Class will help us.
How many members are there in the Flying Club?
There are 2.3 million members – mostly in the UK, though we have quite a sizeable presence in the U.S as well.
Is this so the programme works better with Delta?
Not particularly. We work an awful lot with Delta across the Atlantic in the joint venture but Delta’s Skymiles is an independent programme. These changes are meant to service our customer base which is long haul flyers rather than Delta’s customer base in the U.S. [many of which are short haul.]
Is the aim of these changes to increase the size of the programme and the number of members?
Yes. We have a goal to make Flying Club more successful. So for a customer travelling once one long haul on leisure every year or travelling with us all the time on business we want the Club to be something they all want to join and see a value in.
But you are trying to stop people game the system?
Yes, and we think that some of the ways that people used to have to do that been reduced by making the value for mile in the programme more consistent in the ways you can redeem. That said, the core is designing a programme for the vast majority, not to stop people gaming it and I’m sure there will be some who continue to try. We also wanted to stop our members feeling they have to save all the time before they can get something that is good value. We have reduced economy flights from 35,000 to 20,000 which is one of the lowest on transatlantic, so we are trying to give people a good deal.
But you still have the taxes to pay?
On redemptions, yes, but on Miles and Money we wanted to come up with a much more flexible and valuable product. So now you can pay for the whole flight including the taxes and surcharges if you’ve got the miles. We know if you look at redemption fares we still require customers to pay for the surcharges but they can use the miles against the total far. Before we just offered you a fixed price discounting in the cabin.
Do you have a guaranteed number of redemption seats on all flights?
No, we don’t have a set amount. We actually saw the changes BA made [with a guaranteed number of business class seats on flights]. We don’t think the changes work because you end up in situations where you guarantee the seats because those who know how to play have got all those seats. If you look at the number of rewards eats on each of our planes, I think we have got a lot of availability – it’s based on where our customers want to fly and we try and create enough availability for them on those flights. It will always vary on flight by flight and depending on season.