Virgin Atlantic introduces dynamic pricing in award seat revamp — but is it a cause for concern?

Virgin Atlantic has implemented significant updates to its Flying Club loyalty program, offering more opportunities for earning and redeeming points, introducing new saver reward seats, and enhancing flexibility for award voucher redemptions, alongside a gradual transition to dynamic pricing.

Starting October 30, these changes will bring a range of benefits for Flying Club members, allowing every seat on Virgin-operated flights to be booked using points.

"Our customers are our top priority," stated Virgin Atlantic CEO, Shai Weiss. "Our goal is to serve them well and bring smiles to their faces. In our special Ruby anniversary year, we are making every seat available for points redemption, offering even more rewards to our dedicated Flying Club members."

According to the airline, they are revamping the Flying Club, which seems largely beneficial for members, though there is a minor drawback with the introduction of dynamic pricing.

Here’s a summary of the current developments.

Transition to dynamic pricing

While Virgin's messaging about these updates emphasizes their advantages (more details below), it's hard to overlook the subtle mention of a new dynamic pricing model in the announcement.

"Flying Club members can utilize Virgin Points to book any seat on any flight, providing complete choice and flexibility for our valued customers," Virgin stated in its press release. "Seat prices will fluctuate based on demand, similar to standard ticket pricing."

It’s a brief yet impactful statement. In essence, like many airlines in recent years, the airline is moving towards dynamic pricing to adjust award fares according to demand.

Although this is a new announcement, it’s not entirely surprising given Virgin’s recent collaboration with tech firm FLYR to automate cash seat pricing using AI-driven technology. However, Virgin has not yet confirmed if FLYR will also be applied to award pricing.

Virgin claims that over half of its flights offering economy reward seats will have prices that are the same or lower than current rates. Additionally, a "significant" number of reward seats in Upper Class will be available at the same or lower prices. Whether this indicates higher prices during peak times with scattered lower fares during off-peak periods remains to be seen.

So far, Virgin has not disclosed whether there will be any limits on the maximum or minimum award fares.

Is this transition to dynamic pricing beneficial or detrimental? The verdict is still out, we’re afraid.

Increased award availability

Now that we’ve acknowledged the dynamic pricing elephant in the room, let’s focus on the positives.

Starting October 30, Virgin’s Guaranteed Availability system for award bookings will receive an upgrade, depending on your perspective.

From this date onward, every seat on Virgin Atlantic-operated flights will be eligible for booking with Virgin Points, including upgrade options. This marks a notable change from the current Guaranteed Availability system, which has provided 12 award seats per flight since 2022.

On the bright side, this means you'll have significantly more chances to use your points with additional seats available. However, due to the new dynamic pricing model, you may encounter considerable variations in award seat prices. Once the lower-priced options are taken, expect to spend more points for the same seats.

New opportunities for savings on award seats

To address this, Virgin will introduce a new saver reward seat product, locking in prices for a limited number of seats on each flight. This will secure certain award fares at current rates or even lower.

It remains uncertain whether these saver seats will be available in all cabins or if Virgin will allocate a fixed number per flight. TPG has contacted Virgin Atlantic for further details.

The airline claims that Flying Club members can expect some of their lowest point prices ever, with reward flights from the U.K. to New York starting at just 6,000 points. This is a great opportunity if you can seize these offers before they're gone.

Updates on award vouchers

Changes are coming to how Flying Club members can utilize their Companion and Upgrade vouchers.

Currently, the cabins available for redeeming these vouchers are based on your Flying Club status. Starting Oct. 30, you will be able to use your vouchers for any cabin class.

However, there's a caveat. The maximum value of your voucher will be determined by your Flying Club status.

From Oct. 30, vouchers will have a maximum value of 75,000 points for Flying Club Red members and 150,000 points for Silver or Gold tier members, based on your status at the time of redemption. While you can book seats costing more than this amount, you will need to pay the difference.

If you were hoping to use a voucher for an extensive return trip for two, this change may result in a significant loss of value for some Flying Club Red members.

Enhanced earning potential on flights

The final announcement details a change in the points earned on cash fares. After the rollout, Flying Club members will receive up to 50% more points on Upper Class fares and up to 75% more on Premium tickets. A comprehensive earnings chart will be available starting Oct. 30.

In summary

Virgin Atlantic has significantly improved award availability on its flights, introduced new saver award fares, offered innovative ways to utilize vouchers, and increased points earnings on cash fares. However, these enhancements come with the introduction of new dynamic pricing models.