Are My Calculations about Velocity Frequent Flyer Points Wrong?

Twitchh on 13/06/2023 - 22:00
Last edited 13/06/2023 - 22:01

Hi,
I started churning credit cards and have about 140K Velocity Frequent Flyer points.

I recently moved to Sydney from Melbourne, so I was hoping to use these points to visit my family and friends back home every few months. I am trying to decide how best to spend these points, as I have been told by friends and have read online before that it's not good value to only use points for a half of a flight, and pay the rest with cash to preserve points. I was told it's always best to use points for the full value of the flight.

So my calculations are as follows, and I believe it contradicts that statement, but I'm not sure if I'm missing something.

The flights' RRP is listed at $119 for a one-way trip. (this is the lowest RRP for virgin for a flight one month in advance over the weekend and also somewhat limits the times I can fly).

If I was to pay using points I have two options for a one-way trip:

Option 1: Pay the full amount in points, for a cost of 13,700 points.
In this scenario 1 point is worth 0.8 cents [119/13,700]

Option 2: Pay the minimum amount in points of 7,800 points, and pay the additional surcharge of $34.39
In this scenario 1 point is worth 1.08 cents [(119-34.39)/7800]

Does it not seem more economical to go with option 2? Or am i missing something here?
soz, newbie here.

Thanks

Travel Frequent Flyer Reward Points Velocity Frequent Flyer

Comments

  • Sunny84 on 13/06/2023 - 22:08
    +6

    Option 2 Yes

    Both options are 'reward' seats which is key here, sometimes you can book non reward seats with points and the same route could cost 50k points etc…

    • Twitchh on 13/06/2023 - 23:09

      bit confused by your second line but thanks, i will book with option 2

      • kerfuffle on 14/06/2023 - 00:13
        +1

        By the second line, he meant points plus pay

  • randomusername2017 on 13/06/2023 - 22:17

    one-way trip….13,700 points.

    Thought Syd to Melb one way was around 5k for an economy award redemption…. Business around 15k

    • djsweet on 13/06/2023 - 22:22
      +3

      I think you're thinking of option 2. Usually with reward fares you have to pay the taxes.
      Option 1 is likely either "pay with points", or reward but you are also paying the taxes with points.

      • kerfuffle on 14/06/2023 - 00:14

        You can use points to pay taxes but this is poor value if you do

    • kerfuffle on 14/06/2023 - 00:13

      No, it's been 7800 points plus taxes.

  • stirlo on 13/06/2023 - 22:28
    +6

    Think of it this way.

    When redeeming the seat for points the airline is already flying the plane there and the only cost to them of having you sit in a seat are the taxes they pay the airport. Everything else (pilot, plane, fuel, flight crew etc.) is already a fixed cost.

    So when you book a flight and pay the taxes yourself the cost to the airline is near zero. When you use points to pay taxes they must pay those taxes in cash to the airport so they offer you a worse conversion rate.

    • carwashhair on 14/06/2023 - 07:17

      What I was going to post, except you gave much better context to your answer.

  • Stewardo on 13/06/2023 - 22:36
    +2

    There is 50000 point one way tickets, these are the tickets you were advised against. The two options you listed are the same redemption, they just give you the option to pay the tax in points.

    • Twitchh on 13/06/2023 - 23:10
      -2

      50000 point one way tickets syd to melb? huh

      • Stewardo on 14/06/2023 - 10:15
        +2

        These are called “any seat rewards” they cost a huge amount of points but are always available. They are the ones that are terrible value. 50000points +$53

        They ones your buying are called Reward Seats (award flights) they have limited availability 7800points +$34

  • JimmyF on 14/06/2023 - 09:18

    Does it not seem more economical to go with option 2? Or am i missing something here?

    It depends on what your goals are, if you want to save your points for something else then yes option 2 is the best use to save points. But if you want to use them up, then option 1.

    Honestly they are very similar in the long run.

    Option 1, you get about 10-11 fully paid flights. No cash outlaid.

    Option 2, you get about 18 flights but you kick in ~$620 of your own money as well.

    But if you kicked in $620 that was used in Option 2, to Option 1 to make them 'equal', this cash is equal to buying 5 flights which brings Option 1 up to ~15-16 flights for the same point spend.

    So basically the same same really, depends on how many flights you plan to make. If it was me, save your cash, use up the points.

  • Shadowsfury on 14/06/2023 - 09:34
    +4

    Your calc is correct - always pay the taxes out of your own pocket to maximise the value of your points

  • TasJacks on 14/06/2023 - 10:16

    Velocity released a new table for economy reward seats recently. Tier 1 - 6200 pts for low demand, Tier 2 - 7800 pts for normal and Tier 3 - 9900 pts for heavy demand and blackout period flights. Note: 9900 pt redemptions become active 5th July onwards.

    So you should book your flights asap before 5th July using Option 2.

    • Twitchh on 14/06/2023 - 18:16

      Good to know. cheers

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