New Virgin America Redemption Options on Virgin Atlantic and Australia: Worth It?

Virgin America Elevate members can now use points to redeem for flights on Virgin Atlantic and Virgin Australia, but before you get too excited, fasten your seatbelts because the fuel surcharges, taxes and fees can get out of this world.

Elevate points can normally be used towards any Virgin America flight for about 1.6-2.1 cents per point towards airfare. So you can buy a $400 New York to Los Angeles flight for between 19,000 and 25,000 points. Not bad. So will you be able to get more or less value out of international redemptions? It all depends.

Virgin Atlantic:
You need to use the calculator on this page to figure out how many points and how much cash you need, but I priced a couple popular redemptions:
NYC- London

For economy awards, I doubt this redemption method makes sense since the taxes/fees are a whopping $650. I've seen airfare to London on the NYC route for cheaper than that, so always price it out before you go ahead with a redemption, because you don't earn points on award tickets. If the fare is over $1,000, you'd be getting at least 2 cents per point, so it would be better than redeeming for Virgin America flights.

Upper class (business class) is 35,000 points, which is low for a European roundtrip, but remember, at a 2:1 ratio of Amex Membership Rewards points to 1 Elevate point (though there is currently a 30% transfer bonus promo), you'd be spending 70,000 Amex points on top of a whopping $1,100 in taxes/fees. These tickets can easily cost over $3,000, so those 70,000 Amex points will still save you $1,900 or 2.7 cents each - not great, but not bad either if you don't mind laying out that amount of cash.

Virgin Australia
Virgin Australia is also a partner with Delta airlines and they require 150,000 miles and about $600 for a roundtrip business award. With Virgin America, the same award costs 80,000 points (123,200 Amex points with the current 30% transfer bonus) and $849, which is also a good-not-great deal in my book. The advantage with the Delta award is that you can add on legs within the US at no extra fee as long as they are at the low-mileage level and with Virgin America they charge a huge premium for domestic legs (an extra 150,000 points to leave from JFK for a total of 230,000 Elevate points).

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Summary
I'm not freaking out over these new options since they require a hefty cash, but I welcome new options and I do believe value exists for some people (rarely for economy class travel). Virgin Atlantic and Virgin Australia generally have good award availability (I guess not being in a major alliance helps keep inventory open) and they both have reputations for good customer service and innovative customer experiences.

As with all miles and points decision, do the math for your personal situation. If you are about to shell out a premium for tickets and transferring a relatively small amount of Amex points to Virgin America will save you thousands, then go for it! Alternatively, if the fees on an award come close to the amount of buying a ticket outright, then I'd opt to save your points for more valuable redemptions.

Seth at Wandering Aramean does some great analysis on this redemption option as well.
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