Virgin Australia follows Qantas with lounge fee hike and new $99 joining fee

Virgin Australia has followed Qantas’s lead and announced an increase to lounge membership fees plus the reintroduction of a $99 joining fee.

Virgin Australia is increasing fees for lounge membership and adding a new $99 joining fee. Picture: Virgin Australia

Virgin Australia has followed Qantas’ lead and raised lounge membership fees, as well as “reintroducing” a $99 “joining fee”.

After previously saying the airline had no plans to up the cost of paid access to its lounges, Virgin Australia has flagged a 12.5 per cent increase in annual membership from $399 to $450 as of July 1.

For those who do not hold a current membership, a $99 joining fee will be added from July 1.

A Virgin Australia spokesman said the increases were the result of the higher cost of operating the airline’s lounges.

“This is the first time Virgin Australia has increased its lounge membership fees since 2016,” said the spokesman.

Other fees including the $65 cost of a single entry pass will not change, and the cost of a single entry pass for a child aged two to 17 years will in fact fall from $65 to $45.

The airline informed its 11 million Velocity members of the changes via email late Friday, to give frequent flyers the opportunity to buy a lounge membership before the joining fee is added and the increase takes effect.

For gold and platinum status members of the Velocity loyalty program, lounge access remained free.

Virgin Australia has seven domestic lounges including Sydney, Brisbane, Melbourne, Canberra, Adelaide, Perth and the Gold Coast.

Virgin Australia’s Adelaide Airport lounge. Picture: Virgin Australia

The airline also has three invitation only Beyond lounges in Sydney, Brisbane and Melbourne, available to top tier Velocity members and “decision makers for the airline’s corporate accounts”.

Qantas recently hiked its lounge membership fees by 17 per cent, with the cost for Qantas Club newcomers jumping from $699 to $829.

Annual membership renewal also from $540 to $629.

Qantas said the increases would help cover a $100m upgrade to its lounge network, which included 24 domestic lounges and 600 international lounges through its Oneworld network.

Virgin Australia’s move appeared designed to deliver an end of financial year windfall, as members rushed to renew their membership or sign up for lounge access before the charges kicked in.

After announcing a $236m profit for the six months to December 31, 2023, Virgin Australia CEO Jayne Hrdlicka warned the second half of the financial year would be more challenging due to aggressive market pricing and strong capacity growth.

The airline is in the process of searching for a new CEO and it was announced Ms Hrdlicka would transition out of the role, but stay on until a replacement was found.

Miami recruitment firm Korn Ferry has been conducting a global search with an announcement expected soon.

Virgin Australia is owned by US private equity firm Bain Capital who rescued the airline from administration in 2020, in a $3.5bn deal.

The company had been hoping to return Virgin Australia to the ASX this year but the loss of key personnel derailed those plans.