Virgin Australia’s new Velocity rates: what you need to know

The revamp of Virgin’s Velocity program brings a change to how reward seats are priced.

By David Flynn, June 5 2023
Virgin Australia’s new Velocity rates: what you need to know

Virgin Australia is changing the number of Velocity Points needed to claim a free economy class seat in an overhaul of the airline’s Velocity Frequent Flyer program.

The rejig to Virgin’s points table comes as Velocity itself is revamped and rebranded under the new slogan of “Velocity means fast.”

“We’re really proud to be faster to earn, we’re proud to be faster to redeem, and we’re really proud of being faster to get to status,” explains Velocity Frequent Flyer CEO Nick Rohrlach.

This week’s shake-up plays into the “faster to redeem” space, with Rohrlach claiming “we are proud to now offer the lowest domestic flight redemption rates of any Australian airline.”

But those redemption rates for turning points into seats will vary throughout the year, according to a number of factors which Velocity has not yet detailed – so while this isn’t quite the ‘dynamic pricing’ adopted by many overseas airlines, it definitely adds an uncertainty to the formula. 

Velocity’s new three-tiered points table

In each of the five distance-based zones for Virgin Australia flights, Velocity will offer points-based reward seats in economy class at three pricing tiers.

Note there is no change to the number of Velocity Points needed to snare a business class reward seats – this revamp is all about economy, which if course represents the bulk of seats on Virgin’s aircraft and the bulk of how it’s 11.5 million Velocity members redeem their points on flights.

The lowest number of points per seta falls into Tier 1, at rates which Virgin Australia says will “now start from as low as 6,200 Velocity Points (previously 7,800 Points) plus taxes, fees and carrier charges.”

The Tier 2 band encompasses the previous economy reward seat rates, so you can consider Tier 2 as ‘the new norm’.

The catch will be Tier 3, which increases the number of Velocity Points needed for an economy seat.

Here’s a quick example of how that look in practice:

  • Tier 1, Sydney-Melbourne one-way economy: 6,200 Velocity Points
  • Tier 2, Sydney-Melbourne one-way economy: 7,800 Velocity Points
  • Tier 3, Sydney-Melbourne one-way economy: 9,900 Velocity Points

(Considering that a Sydney-Melbourne business class read seat is 15,500 Velocity Points, the introduction of T3 pricing seriously narrows that economy-to-business gap.)

So if Tier 1 award seats rewards are around 20% cheaper than the standard Tier 2 seat, the Tier 3 seats are around 20% more expensive.

Here’s the complete Velocity points table for Virgin Australia as of June 5, 2023:

Tier 3 pricing will begin on July 5 2023, but Velocity hasn’t yet shared the specifics of when each of these points-based reward tiers will kick in – all we know is each tier and thus each baseline of reward seat pricing will vary throughout the year depending on factors such as the number of reward seats available per flight and the date of travel.

This implies that unless there’s a concerted push by Velocity, peak travel periods such as holidays, long weekends and even days of the week could see economy reward prices set at Tier 3 rates, with most other flights pegged at Tier 2 or the new lower Tier 1 rates.

“To determine which Tier price (in Points) is available for a given flight, check the base fare Point quote provided on the Virgin Australia booking portal,” the Velocity website says.

“The lower Tier Points prices indicated above cannot be guaranteed or reserved without making a Points redemption booking and can only be secured on a ‘first come, first served’ basis.”

In addition, Velocity says guaranteed Economy Reward Seats available to high-status Platinum and Gold frequent flyers will now be charged at Tier 2 pricing, and from July 5 2023 will be charged at Tier 3 pricing.

More Velocity Reward seats 

As part of the new “Velocity means fast” push, Virgin Australia is also unlocking more than one million additional domestic economy rewards seats as of today.

These will be spread across Virgin’s domestic network as well as on all overseas routes (except for Christmas Island and Cocos Island) through to April 30 2024, except for blackout periods around school holidays. 

Those million-plus seats will hit the market at 11.59pm on June 5, 2023 – so if you’ve got points to burn and travel plans to make, set your alarm clock.

09 Aug 2015

Total posts 100

The devil is definitely in the detail for this 'tier' structure. I think we will see Tier 3 fares across all high-demand periods including Friday to Monday, Tier 2 most of the rest of the time and Tier 1 for special promotions etc.

I suspect you're right, this is a step towards dynamic pricing but in a more structured and predictable way. Even if Tier 3 award rates are on school holidays and every Fri-Mon well those are periods when there's pretty much no award space available anyway, so this is a bit of a classic 'some win, some lose, some not affected at all' scenario.

06 Jun 2017

Total posts 48

Hopefully "Faster to get status" includes something to do with Lifetime Status too!

Good info and analysis, ET, I think we need to see exactly how Virgin intends to allocate these 'Tiers' but I expect they won't reveal their 'secret sauce' up front so it will come down to learning over time which Tier of economy award seats pops up at different times.


11 Jul 2014

Total posts 930

I see this more as a push to get retail loyalty customers onboard rather than Frequent Flyers. Myer One etc

Delta Air Lines - SkyMiles

16 Oct 2017

Total posts 154

My guess is Tier 1 will be confined to dates and times where the cash price of the seat is actually low enough that using Velocity points is going to be a waste of those points.

20 Oct 2015

Total posts 232

I think Tier 1 is where the frequent flyer wins and Tier 3 is where Virgin wins. The only way we will benefit from Tier 3 is if Virgin makes reward seats at T3 rates available on high-demand flights where reward seats haven't previously been available

14 Nov 2015

Total posts 43

Wonder if tier 1 will also have the same cancellation policy?  I wouldn't rule out it being something like a points version of Lite fares.

As the policy currently is, when it's borderline between points and cash for value, I always go points as changing and cancelling is much easier and cheaper.

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