Emails in the night… they never say anything good. So it was last night an email from Virgin Australia landed in my inbox. And it isn’t good news.
Virgin Australia is increasing its carrier charges for reward seat bookings made on or after January 8, 2020.
The airline only introduced carrier charges in 2018. Carrier charges are the compulsory airline imposed cash fee payable when redeeming a seat for points. They are not popular with passengers because they are not genuine fees, charges or taxes, despite being dressed up so. Carrier charges are a cash grab by the airline. Qantas is notorious for its carrier charges. Virgin Australia’s were more reasonable so they have escaped the scrutiny leveled at Qantas.
But Virgin Australia should expect some blowback over this.
Carrier charges on reward seat bookings are increasing for all flights except Los Angeles flights. One wit notes reward seats are so hard to get on the LAX routes that increasing carrier charges on those flights is pointless.
The headline figure is an increase from $3.50 to $10.00 per reward seat booking for domestic economy bookings – that’s a 185% increase. The following table provides a summary of the increases effective January 8, 2020.
|Sector||Current Charge||New Charge||Increase (%)|
|International short haul economy||$25.00||$35.00||40%|
|International short haul business||$50.00||$70.00||40%|
|Hong Kong economy||$35.00||$45.00||29%|
|Hong Kong business||$50.00||$98.00||96%|
It will be interesting to read what Virgin Australia’s reasoning for these substantial increases are. It is well known the airline is looking at cutting costs and yesterday Oz Traveller reported on some service cutbacks in domestic Boeing 737 business class.
It was also reported yesterday in mainstream media that Virgin Australia was seeking to fund its buyout of the Velocity frequent flyer program via debt rather than equity.
Could this be linked? Could the increase in carrier charges be be linked to Virgin Australia acquiring 100% of Velocity?
It will be interesting to read the howls of outrage today. Best make those planned reward bookings prior to January 8 2020.