Virgin Atlantic Dynamic Pricing

Virgin Atlantic announced it is hopping on the dynamic pricing bandwagon. Starting October 30, 2024, “Flying Club members will be able to use Virgin Points to pay for any seat on the plane on any date,” while the “price of seats will vary in line with demand, in a similar way to standard tickets.” The announcement provides little information about what the changes will actually entail, other than that the changes are coming. This alone is a bit surprising on Virgin Atlantic's part given their track record of no-notice devaluations. Dearth of details aside, let's see what Virgin Atlantic's dynamic pricing can mean for award travelers.

What Does Dynamic Pricing Mean for Flying Club Members?

Despite high fuel surcharges, Virgin Atlantic Flying Club still offered compelling value outside of non-stop flights between the US and UK, along with frequent award sales that could lead to good deals despite high taxes/fees. Surcharges are also much lower for economy travelers, leading to some great rates.

Airlines that adopt dynamic pricing tout the benefits of award prices that are even lower than under their prior award charts. Sure, lower prices can happen. We have seen that with other airlines that have gone dynamic, like Delta, United, and American. But how often do we see award prices with these programs that were lower than before? Readers will agree that the answer varies depending on the airline program.

I am curious to see how closely award prices will fluctuate based on actual demand. In practice, this has not been the case with most airlines that have gone dynamic. On this note, it doesn't sound like Virgin Atlantic is adopting revenue-based award pricing like Southwest or JetBlue, where award prices are tied to cash rates.

What about every seat being available for redemption? Isn't that a good thing? With dynamic pricing, unlikely. When was the last time you booked a long-haul business class award on United for 200,000 miles one-way? Those awards are widely available…

Ultimately, dynamic pricing is bad for customers because it introduces a ton of uncertainty. (Can you tell me how many Marriott Bonvoy points you need for a night at any given hotel?) Planning your next trip without knowing how many points you will need for a booking is much harder.

Virgin Atlantic Dynamic Pricing: A Glimmer of Hope?

Call me optimistic, but something in the announcement's phrasing really caught my eye. Typically, when an airline announces a switch to dynamic pricing, they focus on how award prices will start at lower levels than current pricing. Coy language like this is vague enough to enable the airline to charge whatever it wants for flights without contradicting itself. “Sure, flights can start at, say, 4,000 miles, but we didn't announce any sort of upper limit to those prices!” Let's not kid ourselves, Virgin Atlantic has left plenty of room for that in its announcement.

Yet the announcement also makes it clear that saver seats will be “priced at or below today’s prices.” So even though non-saver seats will likely cost crazy high amounts, we can expect saver rewards to remain at today's rates. This begs the question, how many saver seats will be available per flight? Since 2022, the airline guaranteed at least 12 seats available for awards on every flight. Now that every seat is available, will they guarantee any amount of seats at saver rates?

I wouldn't hold out hope for any of these optimistic outcomes. Delta Air Lines owns 49% of Virgin Atlantic, and the two airlines are part of a transatlantic joint venture with Air France/KLM. Delta is one of the stingiest airlines when it comes to releasing saver award availability or awards at anywhere near reasonable rates. With Delta's significant ownership stake in Virgin Atlantic, it wouldn't be surprising to see Virgin Atlantic's dynamic pricing practice to resemble Delta's.

I sure hope I'm wrong here, but again, let's compare Delta's award prices with those of United and American. If Virgin Atlantic were to take any cue from Delta, it should be the elimination of fuel surcharges from award redemptions.

What About Partner Awards?

The airline's announcement did not mention anything about partner awards or redemptions. This doesn't mean it can't happen. (Again, Virgin Atlantic's track record with changes to partner redemptions is to not give any notice.) Also, the airline's claim that it is reinventing its Flying Club program gives me pause from concluding that no more changes are forthcoming. But at least for now, this means sweet spots like redeeming Flying Club points for travel on ANA will remain.

Virgin Atlantic Dynamic Pricing: ToP Thoughts

Virgin Atlantic announced it will be adopting dynamic pricing for awards on its own metal starting on October 30, 2024. While they have not yet shared the details of what we may expect going forward, we know from experience that dynamic pricing is not a good change typically. At least they gave us one month's notice this time. Meanwhile, the announcement was also silent on partner awards, which hopefully means those will remain as is.

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