Major changes to Velocity Frequent Flyer announced 17/10/24

[SCM]

100%

***ISSUE #3) International travellers like me are totally disadvantaged, as there are almost NO VA marketed flights available internationally, and those that are available (weeks away from your preferred dates) will be 30+ percent higher priced than what the airline (e.g. SA, Qatar) charges directly on their website. No one-way flights coming into Australia, nor return flights from overseas to Australia, nor multi-city bookings, are possible to book on the Velocity website.

There are very limited VA-marketed international flights, and of those - they are overpriced and very hard to book, which is a nightmare.

 

[pauldab]

I have offered Velocity 2 zero-cost solutions but they have knocked them back. How can I file a formal complaint on this issue? Ridiculous measures taken by Velocity and with no sign of any understanding nor flexibility. They have become the new Qantas... actually worse. I was committed to them for the past 20 years and feel completely mistreated.

Thanks to the MBA vultures now infecting boardrooms across the world this is the new way of doing things when a business is acquired by venture capital, it's all about the money to be made gutting the original business to it's bare bones to improve margin then selling at the first opportunity. (I speak from experience working for a company acquired by one where it's all about how much money can we make, not how we can service our customers or improve the product beyond the bare minimum to stay ahead of our competition).

You can absolutely complain to them but you'd be screaming into the void, Bain Capital don't care, they only see numbers on a ledger, not passengers consuming their product. To them (and sadly a lot of people in the industry) we are called SLF (Self-Loading-Freight) and they just want to move as many of us in their sky busses for the most amount of revenue.

The only way your complaints are going to be heard is by removing your consumption of their product and going elsewhere. Yes, it's hard to do when you only have 1 other option in this case for domestic travel but reading things here many of us are content in not over-extending themselves to retain their status (which is the actual question discussed).

 

[FlyingKangaroo]

Thanks to the MBA vultures now infecting boardrooms across the world this is the new way of doing things when a business is acquired by venture capital, it's all about the money to be made gutting the original business to it's bare bones to improve margin then selling at the first opportunity. (I speak from experience working for a company acquired by one where it's all about how much money can we make, not how we can service our customers or improve the product beyond the bare minimum to stay ahead of our competition).

You can absolutely complain to them but you'd be screaming into the void, Bain Capital don't care, they only see numbers on a ledger, not passengers consuming their product. To them (and sadly a lot of people in the industry) we are called SLF (Self-Loading-Freight) and they just want to move as many of us in their sky busses for the most amount of revenue.

The only way your complaints are going to be heard is by removing your consumption of their product and going elsewhere. Yes, it's hard to do when you only have 1 other option in this case for domestic travel but reading things here many of us are content in not over-extending themselves to retain their status (which is the actual question discussed).

100%. It's the PE playbook (and by extension, increasingly adopted by companies across the board to "rEmAiN cOmpEtiTiVe"). The consequences for the customers are features of the strategy, not bugs.

They don't care about the long-term health of the business. They don't care about customer loyalty or retention. They don't care about the employees. They don't care about the product. They don't care about the company's reputation. They. Do. Not. Care.

The only thing they care about is maximising their cash-out, and they will pull every lever available to them and play with as much fire as they think they can get away with to do so. Their only objective is to exit with as much as they can before they get burned by the inevitable consequences of their decisions. When those come, they'll be long gone. By then, it'll be someone else's problem and ironically, if the company eventually fails and falls into administration, it's another opportunity to start the whole cycle again.

As you say, it's hard to go anywhere else when everyone else is doing it too, particularly when "everyone else" is just one other option.

 

[MEL_Traveller]

100%. It's the PE playbook (and by extension, increasingly adopted by companies across the board to "rEmAiN cOmpEtiTiVe"). The consequences for the customers are features of the strategy, not bugs.

They don't care about the long-term health of the business. They don't care about customer loyalty or retention. They don't care about the employees. They don't care about the product. They don't care about the company's reputation. They. Do. Not. Care.

The only thing they care about is maximising their cash-out, and they will pull every lever available to them and play with as much fire as they think they can get away with to do so. They'll only goal is to exit before they get burned by the inevitable consequences of their decisions. When they come, they'll be long gone.

As you say, you can't go anywhere else when everyone else is doing it too, particularly when "everyone else" is just one other option.

I’m not sure both statements can be correct?

If you want to maximise money out, you need a profitable business. So you need passengers.

But i’m not sure these changes are going to make much difference.

The two main domestic products are not differentiated by their frequent flyer program, as may be the case in the USA or Europe. Airlines aren’t competing on free upgrades and the like.

VA is solely at the value end of the market.Most of the folk flying VA today will still be flying VA in the future because it’s too expensive to fly Qantas.

It was way too easy to get status before these changes… 2 return flights MEL-SYD under DSC and gold was yours. 4 return flights and you were platinum. Crazy!

And at the same time, those spending on premium fares, banking the SCs and getting platinum several times over couldn’t even get a seat in the lounge. Those spending that kind of money could potentially swap to QF, taking away valuable business.

Maybe some folk will swap Choice or Flex fares for Lite. But so be it. They’ll only be able to enjoy ‘lite’ fares for a year or so until their status runs out, then they’ll need to go back to the higher fares if they want baggage etc.

 

[FlyingKangaroo]

I’m not sure both statements can be correct?

If you want to maximise money out, you need a profitable business. So you need passengers.

But i’m not sure these changes are going to make much difference.

The two main domestic products are not differentiated by their frequent flyer program, as may be the case in the USA or Europe. Airlines aren’t competing on free upgrades and the like.

VA is solely at the value end of the market.Most of the folk flying VA today will still be flying VA in the future because it’s too expensive to fly Qantas.

It was way too easy to get status before these changes… 2 return flights MEL-SYD under DSC and gold was yours. 4 return flights and you were platinum. Crazy!

And at the same time, those spending on premium fares, banking the SCs and getting platinum several times over couldn’t even get a seat in the lounge. Those spending that kind of money could pte tilly swap to QF, taking away valuable business.

Maybe some folk will swap Choice or Flex fares for Lite. But so be it. They’ll only be able to enjoy ‘lite’ fares for a year or so until their status runs out, then they’ll need to go back to the higher fares if they want baggage etc.

The PE Playbook counterpoints might be:

• As long as you sell before your revenue takes a material hit, it doesn't matter if it eventually does.
• Revenue is less likely to take a material hit in a poor competitive environment even if you cut costs (an airline for sale in a duopoly environment? Ka-ching!).

It's simultaneously an implementation of the standard US Private Equity Playbook coupled with a race-to-the-bottom in service that they can get away with given the lack of competition and a primary competitor that successfully commands a price premium in large part thanks to corporate and government flying.

The poor competitive environment maximises the potential profits and mitigates the risks of cost cutting. Win-win for private equity that I'd argue enables them to make such drastic changes so quickly without any quick hits to the bottom line. And as far as QF is concerned, they too can lower standards and still command a premium as long as they stay at least one rung above VA on their offering.

I can't think of a better environment to invest in as a PE firm. I imagine Jayne can't either as she starts counting her $50m exit.

(ETA: agree status earning was too easy on VA, but lurching the goalposts so far the other way under the new system to make it multiples harder than QF isn't rational either.)

 

[MEL_Traveller]

The PE Playbook counterpoints might be:

• As long as you sell before your revenue takes a material hit, it doesn't matter if it eventually does.
• Revenue is less likely to take a material hit in a poor competitive environment even if you cut costs (an airline for sale in a duopoly environment? Ka-ching!).

It's simultaneously an implementation of the standard US Private Equity Playbook coupled with a race-to-the-bottom in service that they can get away with given the lack of competition and a primary competitor that successfully commands a price premium in large part thanks to corporate and government flying.

The poor competitive environment maximises the potential profits and mitigates the risks of cost cutting. Win-win for private equity that I'd argue enables them to make such drastic changes so quickly without any quick hits to the bottom line. And as far as QF is concerned, they too can lower standards and still command a premium as long as they stay at least one rung above VA on their offering.

I can't think of a better environment to invest in as a PE firm. I imagine Jayne can't either as she starts counting her $50m exit.

(ETA: agree status earning was too easy on VA, but lurching the goalposts so far the other way under the new system to make it multiples harder than QF isn't rational either.)

Good points!

But the question is perhaps ‘why’?

They want max pax numbers and max $$ coming in for the highest sale price? Why make such drastic changes to the program when they could have made that the buyer’s problem? Let the new owner sort it out.

There must be some bottom line improvement expected, and not the crashing revenue that some expect as a result of these changes. Which I think ties back to the point that there’s no competition.

 

[FlyingKangaroo]

Good points!

But the question is perhaps ‘why’?

They want max pax numbers and max $$ coming in for the highest sale price? Why make such drastic changes to the program when they could have made that the buyer’s problem? Let the new owner sort it out.

There must be some bottom line improvement expected, and not the crashing revenue that some expect as a result of these changes. Which I think ties back to the point that there’s no competition.

They've re-listed now, so any negative consequences that follow technically aren't their problem (though Bain is still a sizeable shareholder), but I've wondered the same. This didn't strike me as a particularly valuable exercise for them in the short-term, either.

The lack of competition likely enabled/emboldened them, but I still feel they went too far and the only reason I can come up with to explain it is a bit of hubris or perhaps an assumption Qantas would seize the opportunity to similarly devalue their programme as well.

It'll be interesting to see what if anything comes of it. You'd expect that if you offer less than your competitor, it should be proportionately easier for your customers to attain to reflect that lower value. But if they get away with it without a meaningful impact on results, safe to say the poor competitive environment helped save them. Looking at the US, it's far more competitive, and still Delta remains very successful despite having what's generally regarded as the poorest-value FFP of the major carriers and poorer benefits offerings than their peers.

 

[MEL_Traveller]

You'd expect that if you offer less than your competitor, it should be proportionately easier for your customers to attain to reflect that lower value.

But it was *too* easy. Family pooling, DSCs, low fares.

They offered less in terms of product, but far more in terms of value for money. Competing on price they win, and don’t need to make it easier for customers to attain status?

QF has golden handcuffs. VA just has handcuffs!! (You previously had VA customers tied to the lower fares, and gave them status. Now they’ll be tied to the lower fares and not have status.)

 

[FlyingKangaroo]

But it was *too* easy. Family pooling, DSCs, low fares.

They offered less in terms of product, but far more in terms of value for money. Competing on price they win, and don’t need to make it easier for customers to attain status?

QF has golden handcuffs. VA just has handcuffs!! (You previously had VA customers tied to the lower fares, and gave them status. Now they’ll be tied to the lower fares and not have status.)

I agreed it was too easy to earn status before. What I question is whether the changes go too far.

I also agree that those buying solely on price won't be going anywhere.

What remains to be seen is whether those who do not buy solely on price will continue to choose VA and whether it will have any impact on the bottom line.

I can only speak for myself. VA will get less revenue from me going forward -- not none, but materially less. But I am but one anecdote. Only time will tell, and even then, it will never tell us how much more (if any) VA would have earned had they opted not to make these changes or for a less dramatic version of them.

 

[MooTime]

It was way too easy to get status before these changes… 2 return flights MEL-SYD under DSC and gold was yours. 4 return flights and you were platinum. Crazy!

But 2 return trips MEL-SYD in J (you failed to mention J was required) during DSC yes gets you Gold.....but if you don't any more during that 12months, then having Gold is totally useless. No benefit.

It's once having Gold that a flyer will continue to fly with VA as they want the lounge access etc. So they prob attained 600SC in reality.

Anyway, having status only valuable as you continue to fly with that carrier.
As the many who attained SG & WP easily with DSC & some family pooling, as they drop status, their desire to continue to fly this carrier will be far less desirable. They won't attain status at QF on same amount of flying, but they will absolutely divi up their flying between VA, QF & JQ. Why continue to fly same carrier once they've taken away a benefit that you had prior, be it fair or not. It's only a natural human effect.

I hold my view they should've just increased the tier thresholds, maybe to align QF. simple & effective change.

The long term benefit of Lift Time Gold is much diminished by this $12 per SC. Certainly the desire to continue to fly VA to achieve this.

VA sent out thousands of surveys over 18+ months & I never recall we're going to introduce a revenue based system, where many will drop status based on current flying patterns. What's your thoughts on this potential system?

Yet they are extremely quick to state, oh we listened to our members regarding a Lift Time Gold benefit.

Bain management a bunch of yank's, that to me says it all.

 

[MEL_Traveller]

What remains to be seen is whether those who do not buy solely on price will continue to choose VA and whether it will have any impact on the bottom line.

And that, i think, is the key question.

How many ‘non-price-sensitive’ pax actually fly VA? The changes would suggest not many. And those that aren’t price sensitive are going to be looked after very well (platinum plus for example).

How many pax flying VA don’t look out the window at a Qantas jet taxiing past and think ‘wish I was on that’? (fast and free wifi, snack/meal, huge selection of IFE content, beer and wine… And for business class, flat beds transcontinental)

 

[MEL_Traveller]

But 2 return trips MEL-SYD in J (you failed to mention J was required) during DSC yes gets you Gold.....but if you don't any more during that 12months, then having Gold is totally useless. No benefit.

It's once having Gold that a flyer will continue to fly with VA as they want the lounge access etc. So they prob attained 600SC in reality.

Anyway, having status only valuable as you continue to fly with that carrier.
As the many who attained SG & WP easily with DSC & some family pooling, as they drop status, their desire to continue to fly this carrier will be far less desirable. They won't attain status at QF on same amount of flying, but they will absolutely divi up their flying between VA, QF & JQ. Why continue to fly same carrier once they've taken away a benefit that you had prior, be it fair or not. It's only a natural human effect.

I hold my view they should've just increased the tier thresholds, maybe to align QF. simple & effective change.

The long term benefit of Lift Time Gold is much diminished by this $12 per SC. Certainly the desire to continue to fly VA to achieve this.

VA sent out thousands of surveys over 18+ months & I never recall we're going to introduce a revenue based system, where many will drop status based on current flying patterns. What's your thoughts on this potential system?

Yet they are extremely quick to state, oh we listened to our members regarding a Lift Time Gold benefit.

Bain management a bunch of yank's, that to me says it all.

Yes, accept you will be likely to fly VA more often, but… you could get the status for just $600* and the spend the rest of the year buying lite fares, or choice. Platinum is just annother $600 and you get free economy X thrown in for the rest of the year.

And for your $600 to get gold, you unlock lounges on SQ/UA for your long haul flights. Pretty good deal. And no need to buy lounge membership which comes with far fewer benefits.

If you’ve lost status you might feel you have more choice, but the only choice would be JQ? Which might be a step too far down?

*assuming you were going to buy economy anyway for $400, moving to business is just $149 extra each way, or $300 return.

 

[MooTime]

And that, i think, is the key question.

How many ‘non-price-sensitive’ pax actually fly VA? The changes would suggest not many. And those that aren’t price sensitive are going to be looked after very well (platinum plus for example).

How many pax flying VA don’t look out the window at a Qantas jet taxiing past and think ‘wish I was on that’? (fast and free wifi, snack/meal, huge selection of IFE content, beer and wine… And for business class, flat beds transcontinental)

mate i was a QF bird few weeks ago & wifi was not working entire flight. yet alone fast. not even an apology, just a no it's not working.

who cares about a large IFE content for domestic flights, most use own device & few others like myself read a book.
flat bed transcon is only selected flights, far from every flight & how many times Ive read on forums here of last minute aircraft change & pax who had flat lie get shafted.

so to look out window & see a red roo & have desire to be on it....hardly.

 

[MooTime]

Yes, accept you will be likely to fly VA more often, but… you could get the status for just $600* and the spend the rest of the year buying lite fares, or choice. Platinum is just annother $600 and you get free economy X thrown in for the rest of the year.

And for your $600 to get gold, you unlock lounges on SQ/UA for your long haul flights. Pretty good deal. And no need to buy lounge membership which comes with far fewer benefits.

If you’ve lost status you might feel you have more choice, but the only choice would be JQ? Which might be a step too far down?

*assuming you were going to buy economy anyway for $400, moving to business is just $149 extra each way, or $300 return.

where do you get 2 return MEL-SYD flights in J for $600????
$150 one way in J?

 

[MEL_Traveller]

where do you get 2 return MEL-SYD flights in J for $600????
$150 one way in J?

Incremental cost, as I explained by the ‘*’.

If you are flying MEL-SYD anyway and the flex fare is $200, moving to business is only $149 extra. $149x2 = $300. Two of those and you have gold under a DSC.

Presumably you are flying anyway. And the $200 flex fare is cheaper than the competitor,

mate i was a QF bird few weeks ago & wifi was not working entire flight. yet alone fast. not even an apology, just a no it's not working.

who cares about a large IFE content for domestic flights, most use own device & few others like myself read a book.
flat bed transcon is only selected flights, far from every flight & how many times Ive read on forums here of last minute aircraft change & pax who had flat lie get shafted.

so to look out window & see a red roo & have desire to be on it....hardly.

So out of my 120 or so VA flights in 14 months, IFE/Wifi might have worked on maybe 2/3rds of them? I had a run of no IFE/Wifi on 6 out of 8 flights in a row.

On Qantas I’ve had it once.

And on Qantas the wifi is free for everyone, not just J or platinum. I take the opportunity of the flights to catch up on shows, the IFE content suits me. But even the , the wifi means I can stream pretty much anything.

 

[HS-TQE]

Also to mention QF are removing their IFE screens on their refurbished 737s and are transitioning to the BYOD streaming model domestically. The Domestic A321s also come with no screens.

QF feels no need to install IFE screens (or maintain) on their domestic fleet (as evidenced by the removal of IFE screens on the 737s during refurbishments) since VA under Bain has since gone down market towards the "Hybrid" Budget Carrier model.

Back onto VA, Bain's deliberately move to off load VA's/VFF's primarily international codeshare customers to QF/QFF may look like a 'risky' move but at the same they are rarely pouring in (or putting in no income) into the VA coffers.

VA's FY25 results may have shown an increase in VFF revenue in their first 6 months of the changes, but it would be interesting when the FY26 results come around, as any potential increase in VFF income for FY26 could see Bain dismiss many of the online community complaints as a "Loud and Passionate Vocal Mintority"

 

[moa999]

Going to be a slow burn this year.


Granted the fare was cheaper than QF (or a points earning fare) on JQ, but it would have been minimum 800+ pts and 10 SC with the competition.

 

[anat0l]

Going to be a slow burn this year.
View attachment 469994

Granted the fare was cheaper than QF (or a points earning fare) on JQ, but it would have been minimum 800+ pts and 10 SC with the competition.

If the 800 pt minimum holds at QF, you'd need to fly approx 12 flights to make the lowest possible QF award (zone 1 Y redemption on QF and selected partners).

Based on that flight you just took, you would need 22 flights to achieve the lowest possible award on VA (zone 1 Y lowest tier redemption on VA Australia domestic only).

That's obviously not the best yardstick, but so there. There's no accounting for status bonuses on either side.

It works better for VA if we did a J fare comparison instead.

 

[FlyingKangaroo]

If the 800 pt minimum holds at QF, you'd need to fly approx 12 flights to make the lowest possible QF award (zone 1 Y redemption on QF and selected partners).

Based on that flight you just took, you would need 22 flights to achieve the lowest possible award on VA (zone 1 Y lowest tier redemption on VA Australia domestic only).

And don't forget QF actually increased earn on domestic flights to soften the blow of the devaluation. Yes, the 800-minimum does mean those shortest trips didn't see higher earn, but the minimum doesn't appear to be going anywhere for now.

QF feels no need to install IFE screens (or maintain) on their domestic fleet (as evidenced by the removal of IFE screens on the 737s during refurbishments) since VA under Bain has since gone down market towards the "Hybrid" Budget Carrier model.

This to me is really the crux of it. As I said yesterday, as long as QF stays one rung above VA on the service ladder, they can keep charging a premium and lower their own standards as long as VA keeps stepping down a rung themselves. Frankly QF is probably delighted.

Absolute classic race-to-the-bottom, except in this case, QF just wants to be one step above bottom.

We all lose, regardless of who we fly.

 

[MEL_Traveller]

I do kind of understand the removal of IFE screens for short haul aircraft, especially where IFE is streaming. It makes sense on a number of fronts… pax can use their own devices, their own headphones, can get viewing privacy, can angle screens away from the sun if necessary, it reduces weight and gets rid of mountains of e-waste.

VA however has very limited content on its streaming IFE, and it hardly ever changes.