Virgin scoffs at air-miles programmes
Virgin Money yesterday lashed out at air-miles programmes linked to credit cards saying that customers spending R3000 a month would have to spend R215000 over six years to get a free return-flight from Johannesburg to Cape Town.
"Over the course of those six years, the average cardholder is hit with R1524 in yearly card fees," credit product director at Virgin Money, Gavin Muller, said yesterday. He said that with the price war between the various low-cost airlines, it was possible to pick up a return flight from Johannesburg to Cape Town for less than R1000.
The company said it had investigated 11 credit card air-mile offerings, assessing how much you would have to spend, how long you would wait, and how much in yearly card fees you would pay to qualify for a return flight from Johannesburg to Cape Town on a variety of airlines, including South African Airways, British Airways (BA) and kulula.com.
Bruce Conradie, managing director of Razor's Edge Business Intelligence, a company that has researched credit card loyalty programmes in the past, said these views were slanted.
He said the research conducted by Virgin looked at those credit cards that relied only on miles gained from spending on credit cards and did not actually claim air miles, or "frequent flyer miles".
"Virgin adopts an extreme view. It ignores the fact that many credit cardholders earn air miles through flying on an airline that operates the relevant frequent flyer programme. These can be combined with miles earned on the credit card to yield a reward flight within an acceptable time frame," Conradie said.