JetBlue, Virgin America Up Business Travel Ante with Elite Frequent-Flier Levels
By Scott McCartney, The Wall Street Journal | Jul. 23, 2012
Two value-oriented airlines, JetBlue Airways and Virgin America, are adding elite tiers to their frequent-flier programs to appeal more to business travelers and reward repeat customers with better seats, shorter airport security lines, pre-boarding and even a free trip into space.
Business travelers love -- and expect -- their travel perks, and large airlines have created elaborate tiers to give customers more incentive to stay loyal to a carrier to achieve better status. Both jetBlue and Virgin America made their announcements at the Global Business Travel Association annual convention in Boston, the largest gathering of corporate travel managers.
At most airlines, including jetBlue and Virgin America, a small percentage of customers generate a large portion of revenue. Road warriors not only buy more tickets but also typically pay higher fares.
JetBlue said this fall it will launch a "Mosaic" tier available to travelers who accumulate at least 12,000 points in a calendar year. Mosaic gets you early boarding, priority security lines, ability to use points to upgrade to seats with extra legroom and free second checked bag (JetBlue let's all customers check one bag for free).
JetBlue's frequent-flier program pays 3 points per dollar spent, plus a bonus of 3 points per dollar spent for booking on jetblue.com. Mosaic members will get an additional bonus of 3 points per dollar spent.
Virgin America said beginning Aug. 8 it will add gold and silver levels to its frequent-flier program. Perks will include: priority check-in, security clearance and boarding; points earning bonuses; free checked-bag allowances; enhanced digital/social rewards; private discounts; an expanded window to purchase first-class upgrades and complimentary space-available upgrades to premium coach seats such as exit rows.
In addition, Virgin America also said the "Elevate" program member who earns the most status points over one year beginning Aug. 8 will get a sub-orbital space flight on Virgin Galactic.
Chief Executive David Cush said the five-year-old carrier purposely made qualifying for its elite levels difficult - 50,000 points annually for gold and 20,000 points for silver. (Like jetBlue, Virgin America bases points on dollars not miles.) Only the top 2 percent of the airline's customers are expected to qualify, compared with 6 percent to 10 percent of customers who achieve some status level at bigger airlines.
"We want to maintain the cachet of exclusivity," Mr. Cush said.
Since Virgin America began listing its flights in the Sabre Holdings Corp. reservation system used by travel agents, business-travel sales have doubled, Mr. Cush said in an interview.
Virgin America also said it will join other airlines in charging a fee for seats in the front of the coach cabin.