Virgin America promises unlimited frequent flyer awards

Like many, I’ve been watching the roll-out of Virgin America’s new service, wondering whether it would be an historic event, comparable to Southwest’s writing the original rulebook on successful discount operations, or JetBlue’s subsequent updating and rewriting of those rules. After all, at least in name, this was a company that traced its lineage to the irrepressibly creative Richard Branson, founder of Virgin Atlantic, among other companies, and heir to the legacy of aviation pioneer Freddie Laker.

In particular, my attention has been on the airline’s loyalty program, EleVAte. Given the weakness of the programs of its primary competitors, Southwest and JetBlue, this appears to be an area where Virgin America could establish its superiority by introducing a program which outperforms JetBlue’s TrueBlue and Southwest’s Rapid Rewards programs.

TrueBlue is a decidedly lackluster program. And while Rapid Rewards has more earning and award opportunities than JetBlue’s program, it still falls well short of the expansiveness of the programs operated by the full service airlines.

So how does EleVAte compare to the programs of JetBlue and Southwest?

In a perplexing departure from standard practice for airline start-ups, Virgin launched flight service on August 8 without having the program in place, promising to address the deficiency in early 2008. But the company has revealed enough EleVAte details to give shape to the program’s philosophy and basic direction.

First, on the earning side, program members will earn five points per dollar spent on published fares. In other words, this is a scheme that rewards customers based on their revenue contribution rather than on the number of miles they fly or the flights they log.

Secondly, on the award side, free round-trip award tickets will be available initially for “as little as 4,900 points” for a short-haul flight. That means members would have to spend a minimum of $980 before earning an award, which would require the purchase of approximately four tickets.

That’s generous compared to redemption rates for Southwest, which awards a free ticket after eight round-trips, and JetBlue, which requires between nine and 25 round-trips before awarding a free ticket. But we’ll have wait to see the complete award chart before delivering a final verdict.

EleVAte will apparently trump the other programs in one key area: capacity controls. Where both Southwest and JetBlue limit the number of seats available for award redemption, Virgin America will allow program members to cash in points for any unsold seat.

What we know so far suggests that EleVAte will be different in some respects, and possibly superior in others. Let’s hope that Virgin America understands that while consumers may be amused by novelty, it will take real value to win their loyalty.