Sitting on a pile of Virgin Atlantic Flying Club miles? Here are your options

Apr 28, 2020

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Virgin Atlantic has been in the news recently due to its very public financial difficulties during the coronavirus pandemic. We’ve been receiving plenty of questions from readers about what this means for the Flying Club programme and if their miles are safe.

Related: Richard Branson says Virgin Atlantic will collapse without government support

It’s worth noting every airline in the world is suffering financial pressures right now, so members of their related loyalty programmes may all be a little nervous about the future of their miles. It’s unreasonable to state that miles in one programme are completely safe while miles in a different programme are at risk given there is so much uncertainty about the future of the travel industry and this is a constantly changing situation. Virgin Atlantic has been front of mind for U.K. travellers at least, as Sir Richard Branson has spoken publicly about just how serious this situation is for the airline.

So, if you are keeping a close eye on your Flying Club balance in between the doom and gloom news, here are your options.

In This Post

Option 1: Relax

You may not know this, but the Flying Club programme isn’t actually owned by Virgin Atlantic, but instead operated by a separate legal entity. This means that even if worse comes to worst and Virgin Atlantic completely ceases operations, it’s unlikely anything would happen to your Flying Club miles straight away. This is a helpful additional layer of protection for Flying Club members.

The situation is similar to the separation between partner airline Virgin Australia and its own loyalty programme, Velocity Frequent Flyer, which entered voluntary administration earlier this month. Virgin Australia may be sold, and then its separate Velocity loyalty programme may remain as is, be sold or be liquidated. There are a lot of unknowns.

Remember, too, that all loyalty programmes reserve the right to change/devalue their programmes at any time and some do without notice whether the associated airline is in a strong financial position or not.

This is a rapidly changing situation. Virgin Atlantic may fully recover from this crisis, it may cease operations or it may live on somewhere in between. It’s still far too early to say, and arguably too early to panic by spending all your Flying Club miles. This means all of these options are rather hypothetical, but it’s designed to ensure you know what your options are, even if you aren’t acting on them right now.

Personally, for the time being, I’m keeping my six-figure Flying Club balance right where it is.

Related: What should you do with your miles if an airline is going bankrupt?

Virgin Atlantic A350. (Photo by Nicky Kelvin/The Points Guy)

Option 2: Partner redemptions

If you’re concerned that Virgin Atlantic as an airline may not survive the coronavirus pandemic you may be looking to redeem your Flying Club miles on partner airlines that may be in a stronger position to still be flying in the future. Remember, you can redeem Flying Club miles on the following partner airlines:

Of that list, note that Virgin Australia is in voluntary administration and South African Airways has been in financial difficulty for some time. So if you are gambling that a partner airline may survive where Virgin Atlantic may not, you may wish to also cross these two airlines off your redemption options list.

Note that using miles for premium cabin awards will usually give you amongst the best value of any redemption options. We currently value Flying Club miles at 1.2p each, but you can easily attain more value than this with a premium cabin redemption.

Related: What are the 5 best uses of Flying Club miles?

However, it’s not guaranteed that a partner airline would honour a redemption booking if the original airline and its associated loyalty programme both cease operations. This all comes down to individual airline partnerships and their accounting processes, which are commercial in confidence. Some airlines may compensate partner airlines for redemption tickets at the time of ticketing, while others may not do this until the flight has actually been flown.

Travel Industry Analyst and President of Atmosphere Research Group, Henry Harteveldt told TPG that if a partner airline like Delta had not been paid by Flying Club for a redemption flight on Delta metal booked with Flying Club miles, and then the Flying Club programme suspended operations, it’s likely Delta would cancel those redemption bookings it had not been paid for. Harteveldt notes that if this were to happen, Delta may offer those affected passengers discounted cash fare as an alternate option.

I asked Virgin Atlantic about this specific question, and a spokesperson declined to provide comment. The airline noted its financial difficulties but advised TPG that it was focusing on the ongoing viability of the airline rather than speculating about what might happen in a scenario it’s trying to avoid.

(Photo by Nick Ellis/The Points Guy)
(Photo by Nick Ellis/The Points Guy)

Option 3: Convert to hotel points

While hotel groups have also been suffering the financial pressures of the global downturn in travel, their long-term future has not been considered as bleak. Why? Because while airlines are asset-heavy businesses with huge ongoing fixed costs like aircraft and airport lease payments, most hotel groups do not operate most of their own hotels. Instead, they have management contracts with independent hotel operators that pay the hotel groups a fee to operate a hotel under the brand of the hotel group. This is why global hotel groups have so many different brands within their group.

This means that hotel groups and their associated loyalty programmes should have more stability than airlines right now. You can transfer Flying Club miles to become Hilton Honors points at a rate of 2:3 (so 20,000 Flying Club miles would become 30,000 Hilton points). TPG U.K. values Flying Club miles at 1.2p each, but Hilton points at only 0.4p, so you’re going to be losing a big chunk of value by converting from Flying Club to Honors. Those 20,000 Flying Club miles, worth £240 by our valuations, would become 30,000 Hilton Honors points, worth only £120 by our valuations.

Keep in mind the value you’re giving up by moving them into what you may deem to be a safer programme.

Related: 5 great Hilton Honors redemptions in Europe

You could also convert 1 Flying Club mile into 1 IHG Rewards Club point, which is arguably even worse value.

Option 4: Eurostar vouchers

You can use Flying Club miles to buy Eurostar vouchers at a rate of 25,000 Flying Club miles per £100 voucher. This is only going to get you about half of our valuation of Flying Club miles. Remember, too, with all the travel restrictions, you would then have a voucher you would have to redeem before its expiry date.

Related: Should you transfer your American Express Membership Rewards points to Eurostar?

Option 5: Virgin wines

Wine is certainly a popular option right now as everyone does their best to #StayHome. You can use Flying Club miles to purchase Virgin wines, though you’ll receive the same value as the Eurostar vouchers above — about half of what we consider Flying Club miles to be normally worth.

After initially restricting new customers because of the overwhelming demand, Virgin Wines will now deliver wine to you even if you aren’t a member of its wine club.

Related: Why some booze tastes better on planes

(Photo by Dan Kitwood/Getty Images)
(Photo by Dan Kitwood/Getty Images)

Option 6: Virgin Group gift cards

Gift cards are traditionally a versatile but low value way of using miles, and this is no exception. You’ll receive the same value as the wines and Eurostar options above, well below our normal valuation of Flying Club miles. These gift vouchers can be used for different Virgin Group companies, though note many of these are travel companies and you may not wish to use them to book travel right now.

Option 7: Donate miles to charity

If you’re feeling charitable during these uncertain times, you always have the option of donating some (or all) of your Flying Club miles to the charity WE (formerly Free the Children). Note that donations do not convert from miles to cash — your miles will be transferred from your account to the charity for them to use as they see fit in their charitable endeavours.

Related: How to donate your points and miles to charity this Christmas

Bottom line

There’s not a right or wrong answer about how to use Flying Club miles right now, as this is really a hypothetical discussion. Ideally, you’ll always use your miles for something you’ll love and get great value from especially if you can maximise your travel — when it’s safe to do so, of course.

But with so much uncertainty right now, you might wish to do nothing, use them for some sort of travel redemption (noting the current travel restrictions) or redeem them for a lower value but more stable product or voucher. You have plenty of options right now, and how you choose to use them is entirely up to you.

Featured image by Jean Arnas / The Points Guy

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