The embattled airline has unfrozen its Velocity frequent flyer program but don’t get too excited – there’s a catch.
The embattled airline has unfrozen its Velocity frequent flyer program but don’t get too excited – there’s a catch.

Virgin unfreezes frequent flyer points

Virgin Australia is allowing customers to use their frequent flyer points again - but there's a catch.

The embattled airline froze the Velocity program last month, leaving more than 10 million Australians wondering about the future of their points.

Today Virgin announced customers could redeem points, but only on domestic flights and not on other items.

The points can be used for flights from September 1.

Although there is no public disclosure of the total value of Velocity points that remain in circulation, industry experts estimate it to be as much as $2 billion.

The company said they were opening the program for domestic travel because it was the most popular way people spent their points.

"Velocity is pleased to resume offering Virgin Australia domestic flight redemptions for our members for travel to some of our most popular domestic redemption destinations from 1 September this year," a Velocity spokesperson said.

"We're hopeful that domestic travel restrictions and state and territory border lockdowns ease by September and for many of us, a local holiday and catching up with interstate family and friends will be well overdue.

"We look forward to sharing more offers with our members as we emerge from the COVID-19 crisis and travel resumes more broadly."

One-way domestic reward flights begin at 7800 Velocity Points in economy class and 15,500 Velocity Points in business class, plus taxes, fees and charges.

Flights represent the best value-for-points offers.

People can get anywhere between $20 and $80 in value for every 1000 Velocity Points when redeeming for flights, while using points in the Velocity eStore typically offers a value of $5 per 1000 points at best.

But the ability of people being able to take the flights depend on whether the failed airline is bought and recapitalised, and if the new owner would honour the program.

Non-binding, indicative bids for the airline were due today and at least four serious bids are expected to be lodged with the administrator.

Originally published as Virgin unfreezes frequent flyer points