Originally posted by AtlanticFlyer
As has been pointed to before, they are trying to attract US based customers who have the domestic airline's FF programmes as alternatives. They have to be treated as two different markets. This has always been the way, as when BA sold business class tickets in the early 90s from EU cities to JFK/IAD via LHR and automatically offered one/way on Concorde. This deal was not availalable to UK originating customers. Airlines, in particular, have to fight harder to gain customer loyalty from customers in the airline's non home countries.
I can only use Virgin if I am flying to London. They are useless for domestic travel and travel to almost any other city in the world (since I have no desire to connect at LHR anymore). So, if I am going to collect miles and earn status I will do it on an airline (or alliance) that I can make much more use of. Virgin have to offer a really good deal to make it anywhere near interesting to consider loyalty with them any more.
In addition, as far as redeeming miles goes, I can either spend 33,750 miles plus US$439.80 for an east coast - LHR Y reward flight and then get a connector to my european destination, or I can spend 50,000 miles and US$50 with UAL to fly directly to my European destination. If I am earning miles to take my family on vacation, this is a significant disadvantage for VS. This deal is not really targeted at the frequent US based J pax, who already earn lots of tier points and miles.
AF
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