BP ditches Virgin partnership in favour of new points deal with Qantas

The way we earn Virgin Australia’s Velocity points is about to change after the airline was dumped by major points trading partner BP.

Petrol giant BP has dumped its points partner Velocity for a new deal with Qantas in a move Virgin Australia’s boss says is “disappointing” but was expected.

From early next year, customers can earn Qantas frequent flyer points, instead of Virgin’s Velocity points, on fuel, snacks and other purchases at BP’s 1400 service stations, including those owned by its partners, the fuel giant announced today.

The move is part of the new BP Rewards loyalty program, which will earn BP customers rewards points for every litre of fuel they buy and every additional dollar they spend inside the service station. BP’s program already exists in the UK and the US.

Virgin Australia chief executive officer Paul Scurrah told news.com.au Virgin customers could still earn Velocity points at BP until March.

“It’s disappointing but it’s not a long term setback,” Mr Scurrah said.

“BP has been an excellent partner for Velocity. We have suspected for some time — because they have been working out of London on a global rewards program that’s BP branded — that they might actually do something like this.

BP has ended its points program with Virgin Australia’s Velocity program. Picture: AAP/David Mariuz

“We have also been working on mitigations for a while so what’s important to our nearly 10 million members is that we quickly give direction on how once it finishes which isn’t until next March.

“You can still earn Velocity points until next March, when that does happen it’s a pretty easy switch to say, this is our new partner which gives as good if not better earn opportunity for you by buying your fuel here.”

Mr Scurrah said Virgin was working with new partners to allow Velocity frequent flyer members to continue earning points at the pump.

“We do know people like convenience when it comes to fuel and we are working with partners who can match or better the convenience of BP anyway,” he said.

“Until next March they can continue using those points exactly like they do today and way before the end of that arrangement we will be advising members exactly who they can swap their allegiance to so they can continue earning Velocity points.”

Qantas points can soon be earned on purchases at BP petrol stations. Picture: Jenny Evans

The new Qantas deal ends BP’s fraught partnership with Virgin Australia’s Velocity scheme, which in 2017 saw Virgin Australia take BP to court for seeking to end their points contract.

BP had been seeking a $1.8 billion purchase of Woolworths’ petrol stations, which were linked to Qantas, but the acquisition was ultimately blocked by the Australian Competition and Consumer Commission.

Under BP’s new points scheme, customers can choose whether to earn BP Rewards points or Qantas points. The earning rates are yet to be revealed.

“We know that access to rewards is an important driver when it comes to consumer choice,” BP Australia vice-president of sales and marketing Brooke Miller said in a statement.

“Our research shows a significant portion of customers choose a service station based on rewards alone.”

Qantas frequent flyer members will still be able to earn points at Caltex service stations through the Woolworths Everyday Rewards program.

BP is ending its partnership with Virgin Australia’s Velocity. Picture: AP/Caroline Spiezio

The move comes at a difficult time for Virgin Australia, which will cull 750 jobs and rethink its routes after announcing a dismal $349.1 million loss last week.

The airline, which recorded its seventh consecutive annual loss last week, said the job cuts aimed to save $75 million by the end of the 2020 financial year.

The airline is going to review all routes in its network in a bid to lower costs and use aircraft more efficiently.

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