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Virgin America Launches Upgraded Loyalty Program

Virgin America celebrated its fifth anniversary on Wednesday and officially launched an upgraded frequent flier program.

Photo: Darren Booth for CNBC

I recently flew with Virgin America for the first time and was incredibly impressed with the service and operation. My experience lived up to what I'd expect from a Richard Branson-envisioned airline. The only thing ever holding me back from flying them more frequently has been my vested loyalty in other airlines' frequent flier programs. But that could change.

The new program adds elite tiers allowing frequent fliers to enjoy priority check-in, boarding, upgrades and other perks. I had the opportunity to speak with Phil Seward, Virgin America's director of loyalty, and found out a bit more about why they introduced the new benefits and what the future holds.

Virgin America received a lot of feedback from its passengers during the past five years, particularly those who fly with them frequently. One of the most requested improvements by Virgin's road warriors to its Elevate frequent flier program was the addition of elite tiers or some other type of recognition of loyalty.

Most airlines, such as legacy carriers American, Delta and United , bestow added perks to those who fly a certain amount of miles each calendar year. With the launch of the upgraded Elevate program on Wednesday, Virgin America now offers similar benefits to its most loyal customers. But to achieve elite status on Virgin America, the amount you spend is the deciding factor over the amount of miles you fly.

Points earned in Virgin's program accrue at the rate of five points per dollar of airfare, regardless of miles flown. Virgin America happens to be the first U.S. airline to have introduced a revenue-based frequent flier program, something more frequently seen on international carriers. Other airlines have since followed suit, including JetBlue and Southwest .

"We're pleased with our program, as are our members, and we feel it's fair and more reflective of the value they receive," Seward says. He thinks more airlines will eventually switch to a revenue-based model and I have to agree.

Changing loyalty to another airline can mean starting from scratch and losing out on perks you've grown accustomed to enjoying. And Virgin America knows this. Many carriers offer status matches or challenges to lure business, and Seward says they're considering some type of status match program later this year. In the meantime, Virgin America wants to reward its current loyal members with the upgraded perks and ensure it executes the new program to high standards.

One of the benefits I enjoy as an elite on American and United are complimentary upgrades to first class. Virgin's enhanced program does offer complimentary upgrades for elites to its Main Cabin Select seating area (enhanced legroom seats in the exit rows or bulkhead offering additional perks of complimentary meals, drinks and entertainment). But first class upgrades still come at a price.

Part of this reason, Seward says, is because they want to protect the value proposition of their small eight seat cabins, as well as remove the unpredictability and gamble of getting an upgrade. When I fly with United on a coach ticket, for example, I'm eligible for a complimentary upgrade to first class if seats are available at 100 hours from departure. I tend to wait with anticipation for that clock to strike and often get disappointed when my upgrade doesn't clear.

Virgin America's approach takes this uncertainty out of the picture, and Seward thinks it enhances the customer experience. The new program is a definite upgrade and it will certainly enhance loyalty among its frequent fliers. I'll be watching for further developments with peaked interest and eventually might have to reconsider where my travel dollars are spent.

Travel

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