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Virgin America added to American Express Membership Rewards — could be good deal

by on Thu September 15, 2011 • No Comment

Virgin AmericaAmerican Express just added upstart airline Virgin America to its Membership Rewards point to mile transfer partners list. This is a boon to people who live near San Francisco, Virgin America’s hub and those of you in New York, Boston, or D.C. — with nonstop flights to the West Coast. Membership Rewards points can be earned via the  Gold Card and Platinum Card from American Express.

We’re not yet sure how the conversion will work — that will be clear when the transfer is officially activated in October. If it’s 1:1 like many partners this will be a good deal. A point in Virgin’s frequent flyer program is generally worth 2-2.5 cents, a very respectable return on points.

Basically, points are based on the dollar cost of the ticket, and it usually works out  CrankyFlyer’s review of their program leads to the cost in points equal to about 45x the cost in dollars. We saw similar when we checked our own flights. So a $100 flight would cost 4500 points, or about 2% return on points. It varies, but this is a decent rule of thumb.

Given there are no capacity controls this is a good value for very flexible redemption and can lead to some good bargains like New York to LA for 17,000 points roundtrip vs a $375 airfare and 25,000 points on most airlines.

The big catch is whether Membership Rewards points will transfer 1:1 to Virgin and retain this good spending power.

One reason think they might: Virgin America’s own credit card earns 1:1

One reason to think they might not: You earn points from flying based on the cost of your ticket rather than miles flown, so it’s tougher to bank high mileage balances. As a result they keep the reward level requirements reasonable. If people with big American Express point balances have carte blanche to transfer at 1:1 that could impact the integrity of the program.

Stay tuned! It’s not a full replacement for the loss of Continental point transfers, but it is intriguing.

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