The sad demise of Virgin America is coming as it “merges” with Alaska Airlines. In reality, Alaska acquired Virgin, which is bad news for Virgin customers. First to go was the ability to transfer points from Starwood to Virgin America, at the favored 20,000 SPG for 25,000 VX rate, and now there is a “devaluation” incoming. They definitely did not handle it as well as the Starwood & Marriott “merger”. Read on for more!
Virgin & Alaska Details
Not strictly a devaluation – but rather Virgin intends to convert fully to the Alaska Airlines system. That means, you can earn and redeem Elevate points until the end of this year (12/31/17), after which the remaining Elevate points will automatically be converted to Alaska Mileage Plan Miles.
If you convert now, though, you get a 30% bonus on the conversion. That means that 1 Elevate point equals 1.3 Alaska Miles.
I did some basic cost comparisons, for a LAX to SFO flight that I needed, just to see the differences.
For the same day and time of day, the Alaska converted price was significantly more.
For example, the 7:55am Flight cost 7,500 Alaska miles, or $74. Alternatively, you could get it on Virgin for 2,882 points, for a 2.60 A/VX conversion. This is twice the rate that Alaska is currently giving (1.3 A to 1 VX).
For a later flight, the 10:07am is 12,500 Alaska miles, or 6,154 Elevate points, for 2.03 A/VX. Again, this is much higher than the official conversion rate of 1.3 Alaska to 1 Virgin America.
Alaska has to expect that Virgin America customers, at least some of them, will do their due diligence on point valuation. I am displeased at the shoddy conversion rate offered to Virgin America customers, which definitely will turn me off from Alaska flights. I understand their business model of fixed pricing (7.5K, 12.5K, 25K, etc.) like United, AA, and others, as compared to the variable pricing model of assigning a rough cents per point valuation, like Virgin America and Southwest Airlines. Regardless, some parties would be upset, and because Alaska acquired Virgin, and not the other way around, Virgin will have to convert to the Alaskan business model.
What Does This Mean For Me?
I was one of those fronting a large amount of SPG to Elevate miles before the conversion stopped, and this further change means I’m on the clock. I want to spend my points balance by the end of the year, to avoid this forced transfer of Elevate points to Alaska, and the resulting devaluation.
Currently on Virgin America, I am picking up about 2.6cpp for my Starwood points, and would hate to see that cut to 1 or 1.3 or 1.5 cpp in Alaska miles. Frankly, that’s just a poor use of points, and I could do better even with a 2% cash back card.
Note: A reader pointed out these comparisons apply to domestic travel, and may not hold true for international travel.
Use up those Virgin America points by end of 2017! Don’t let them go to waste in Alaska’s program, especially as those flights will cost more comparatively using Alaska miles versus Elevate points. Thankfully, I can spend my points on my friends or family, and should have little to no balance by the end of the year.
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