At What Rate Should Virgin America Points Convert Into Alaska Miles?

Yesterday Alaska’s takeover of Virgin America was finalized, and there are a lot of frequent flyers wondering what this means for the future of their points, status, etc.

alaska-virgin

As of now there are a lot more questions than answers, unfortunately. What we know is the following:

  • Starting December 19, 2016, Virgin America tickets can be purchased on Alaska’s website, and the two airlines will offer reciprocal mileage earning, as well as priority check-in and boarding for elite members
  • Starting January 9, 2017, Alaska will status match Virgin America elite members

alaska-virgin-america

So they’ve already indicated that we’ll get reciprocal mileage earning and basic elite benefits, though Alaska hasn’t yet announced when points can be transferred between programs, and at what rates. Personally I’m not optimistic that points transfers will be possible anytime soon.

When can Virgin points be transferred to Alaska?

In the time leading up to the merger I’ve received several messages from readers along the lines of “does this mean that I can now indirectly transfer Amex/Citi points to Alaska?” or “will Alaska now be added as a transfer partner for Amex/Citi?”

The answer to that is “no,” at least for now. Both programs will continue to be run independently, and as of now they haven’t announced plans to allow transfers between programs.

Alaska has said that “more details will be unveiled on how Elevate points can be used to book award travel on Alaska and Alaska Global Partners,” though that’s vague.

Perhaps the first thing to consider is at what rate points should convert between programs.

Alaska-Virgin-America

At what rate should Virgin points convert into Alaska miles?

I don’t actually think Alaska has decided this yet, so perhaps it’s worth having this discussion here, in hopes that they see this as they make decisions. For example, before Marriott’s takeover of Starwood was complete I speculated that the fairest transfer ratio between currencies would be one Starpoint per three Marriott Rewards points, and that’s what they ended up going with (not that I’m taking credit for that, but I still think it’s fun to discuss).

Off the bat I should say that I think that one Virgin America Elevate point is worth more than one Alaska mile.

elevate-1
Citi ThankYou points transfer to Virgin America at a 1:2 ratio

So, what are the first things that come to mind when I think of a “fair” transfer ratio between programs?

  • Starpoints convert into both Alaska miles and Virgin America points at a 1:1 ratio
  • Both the Alaska and Virgin America credit cards offer one point/mile per dollar spent on base spend
  • Amex Membership Rewards points and Citi ThankYou points both convert into Virgin America points at a 2:1 ratio, while they convert into most other mileage currencies at a 1:1 ratio
  • Virgin America points can be redeemed for ~2.3 cents each towards the cost of a ticket on Virgin America, which is among the highest cash value you can get out of any airline points currency
  • Alaska miles are great for premium cabin redemptions and can offer outsized value, but a vast majority of people are looking to redeem miles for flights within North America, where Virgin America points are significantly more valuable; so at large we can’t assess the value of points based on the few people who are able to redeem for Cathay Pacific premium cabins, for example

alaska-points-1 alaska-points-2
Virgin America points can be redeemed for ~2.3 cents each towards the cost of a ticket

So when I think of the two currencies, I think a 1:1 transfer ratio wouldn’t be fair towards Virgin America members, while a 1:2 Virgin America to Alaska ratio would be too generous.

So I think the fair transfer ratio is somewhere inbetween, perhaps one Virgin America point should convert into 1.5 Alaska miles. To me that’s the closest to being a fair value.

As we’ve explained here on OMAAT in the past, there’s no scientific way to value points, really.

Last year Travis wrote a great guide to valuing your miles & points, which can be found here:

The idea is that miles are worth more than your acquisition cost and less than the cash value of what you’re trying to redeem for. Where exactly in that range you value points can vary significantly, though, based on how many you have, how much you’d otherwise pay for such a redemption, etc.

Will Mileage Plan even remain in its current form?

Perhaps the bigger question is whether the Alaska Mileage Plan program will even remain in its current form. While Alaska has said that they’re committed to keeping the Mileage Plan program around in its current form (including continuing to award miles based on distance flown rather than revenue), the reality is that frequent flyer programs across the board are starting to look more like Virgin America’s revenue based program.

So perhaps this won’t even be as simple as Virgin America points converting into Alaska miles, but rather both points currencies being converted into a new currency. While this goes against what Alaska has said, this might just be a convenient time for Alaska’s program to “evolve.”

Regardless, if I had to guess, I don’t think we’ll see points transfers between Alaska and Virgin America anytime soon, though I certainly could be wrong.

Do you think Alaska will allow transfers between programs anytime soon, and when they do allow it, what do you think a fair transfer ratio is?

Comments

  1. I guess it’s time to sign-up for the Virgin America CC…is the 15k sign up with the premium Visa the best it gets?

  2. Alaska has been stressing the importance of keeping loyal Virgin fliers. Even if a 1:2 ratio is generous (I personally think that’s fair), that’s certainly a good way to establish a relationship with the Virgin loyalists. I’m based in SF so I fly Virgin a lot so I can tell you personally that getting things like points transfer right matter.

  3. FYI – TYP will no longer be transferable to Virgin America after January 22, 2017.

    Pretty clear AS wants nothing to do with Citi.

  4. Purely speculative question here, Lucky, but here goes….
    I’ve been banking miles with VX with the goal of redeeming 45k Elevate points for Virgin Australia LAX-MEL. And my Alaska Mileage Plan piggy bank is meant for CX first class to Asia from LA.
    Which of these do you think is more in jeopardy from this merger?

  5. @Rick – definitely Virgin Australia. They are tight with DL and just announced AC partnership, so there is little value for Virgin Australia to continue partnering with the merged Alaska.

  6. I don’t know of any blog that valued VX Elevate points on the same level as Alaska, as most considered VX’s cpp to be higher (until speculation started yesterday).

    Several months ago, people were questioning whether the conversion rate should be 1:2 or 1:3. The transfer rate should be 1:1.5 at a minimum, with 1:2 being likely. I have no idea why people would be saying 1:1, other than to troll here.

    Serious question: Does the revenue-based earning of VX Elevate offer any value over Alaska’s mileage-based earning?

  7. Marriott travel packages (nights + flights) values Elevate points at 2X Mileage Plan miles. Check out their redemption chart. 1:2 seems fair. 1:1 would be rape.

  8. Why are so many of your post titles in the form of a question? It’s annoying at best and clickbait at worst.

    A title should be informative not an obfuscation.

    My guess is the conversion rate will be 1:2.

  9. Alaska should keep a mileage based program as there are surely customers who feel cheated by AA, DA, UA devaluing what they got for years and will become loyal to the one remaining domestic airline that knows what a mile is. Why not even advertise it as a competitive advantage, coming up with cute ads that ask “when is a mile not a mile?” to ridicule the gall AA, DA and UA have to still call them miles when they’ve devalued them to something much less. With the expanded route map they fly almost every where I go and I’ll not fly anyone else as long as they remain miles true.

Leave a Reply

Your email address will not be published. Required fields are marked *