Virgin Australia delays launch of loyalty program with BP
Virgin Australia Holdings said it will postpone the launch of its frequent flyer loyalty program partnership with BP Australia. Announced in November, the launch was supposed to be in early 2015 but is now postponed to before June.
Virgin Australia’s Velocity card is a moneymaker for the low-cost airline. It sold a 35% stake in Velocity last year to Affinity Equity Partners for AUD336 million, in a deal that valued Velocity at AUD960 million.
While full-earnings are not disclosed for its loyalty division, Virgin said that Affinity had received AUD5.3 million of earnings from AUD16 million in revenues between 22 October and 31 December 2014.
Under its partnership with Virgin Australia, BP customers are able to earn points at the pump by swiping their Velocity cards. It involves BP buying Velocity points from Virgin, adding to the Velocity program’s revenue from outside sources.
The Velocity program currently has 4.8 million members, and Virgin is hoping to raise this number to 7 million by 2017.
The loyalty program was meant to compete with a similar partnership announced between Qantas Airways and Woolworths.