BP deserts Virgin’s Velocity for Qantas frequent flyer program

In a further blow to Virgin Australia, oil company BP Australia is severing all ties with the airline’s Velocity program.

Qantas is teaming up with BP in a new loyalty partnership.

In a further blow to Virgin Australia, oil company BP Australia is severing all ties with the airline’s Velocity program to team up with Qantas.

From early next year, fuel and in-store purchases at BP service stations will earn customers Qantas frequent-flyer points instead of Velocity.

The new partnership signals the end of a four-year tie-up between BP and Velocity and will also see the Qantas-Caltex shift slightly.

It comes a week after Virgin Australia reported a $315.4m net loss for the 2019 financial year and 750 job cuts, in contrast to Qantas’s $891m net profit.

BP and Virgin Australia had been on rocky ground since 2017 when Velocity sued the oil company for trying to end their partnership earlier than planned.

At the time, BP was trying to buy Woolworths-owned Caltex service stations with the intention of rebranding them as BP.

When the $1.8bn deal was blocked by the Australian Competition & Consumer Commission, BP walked away from it and continued to “reward” customers with Velocity points. That will end from early next year following the agreement with Qantas.

BP Australia’s vice-president of sales and marketing, Brooke Miller, said research showed a significant portion of customers chose a service station based on rewards alone.

“We’ve had a successful partnership with Velocity over the past four years and we’ve learned plenty along the way,” Ms Miller said.

“BP is now ready to diversify its customer loyalty offer and we believe our new program is the best way to reward and delight our customers.”

Qantas Loyalty chief executive Olivia Wirth said the airline’s almost 13 million frequent flyers would welcome the chance to earn points with BP Rewards.

“Drivers spend thousands of dollars on fuel each year and our partnership with BP is an easy way for frequent flyers to earn points and get closer to their dream trip,” Ms Wirth said.

Qantas Business Rewards customers will no longer be able to earn points with the Caltex Star Card but will have to switch to a BP Plus fuel card.

Details on points earned for each dollar spent at BP will be revealed closer to the launch date.

A Virgin Australia spokeswoman said that until then Velocity members could continue to earn two points for every dollar spent at BP.

Loyalty programs were the strongest performers for both Qantas and Virgin Australia last financial year, achieving increased earnings in contrast to operational areas that saw profits eroded by high fuel prices and foreign exchange headwinds.