Bain buys Virgin Australia: What does it mean for passengers?
What's happening with travel credits, frequent flyer bookings and routes.
After going into administration in April, Virgin Australia confirmed on Friday 26 June that a deal has been signed that will see the airline acquired by US private equity firm Bain Capital.
That deal still has to be approved by creditors at a meeting in August. But assuming it goes through, what will that mean for Velocity Frequent Flyer members and other passengers?
Much of that detail is yet to emerge, but here's what we know so far. We'll expand and update this guide as new information emerges.
What's happening for Virgin Australia employees?
On the staffing front, Bain has said it will honour all employee entitlements, but it seems likely many furloughed employees will not be re-hired.
What happens to my existing Virgin Australia booking?
Existing travel bookings will be honoured, Bain has said, including those made with Velocity Points. There are still question marks over when flights will resume into states with border restrictions, though. It's also widely assumed that Virgin will be operating a smaller network, which means that some regional flights might ultimately end up being refunded.
Will I still be able to use my Virgin Australia travel credits?
Yes, you will. Bain has said all existing travel credits will be honoured, which is good news if (like me) you've got quite a few sitting around from flights cancelled during the pandemic.
Will Virgin Australia continue offering international flights?
Not in the short term. Virgin Australia was already scaling back its international commitments prior to the coronavirus pandemic. While it operated some government-backed international repatriation flights in April and May 2020, those have also ceased.
It seems unlikely that any Australian airlines will be running many regular commercial international flights for the rest of 2020. Even when international restrictions ease, Virgin is likely to concentrate on Australian flights, with perhaps some New Zealand and Pacific routes once the much-discussed travel bubble opens up.
What's going to happen to Velocity?
That's an open question. Bain's statement says it wants to continue to attract business flyers, and a frequent flyer scheme is key for the business market. Its statement also said it will honour existing frequent flyer bookings, but didn't say anything about how points will work moving forward.
Realistically, redemption options for Velocity are likely to be more limited if Virgin is operating a largely domestic route. Partnerships with international airlines will also come under scrutiny. Prior to going into administration, Virgin has paused the ability to transfer Velocity Points into Singapore Airlines' KrisyFlyer. It would be surprising if that option returns.
What's happening to Tigerair Australia?
There's been no official word as yet, but my assumption is that discount airline Tigerair, which was a Virgin subsidiary, is now finished in Australia. Even prior to the coronavirus pandemic, Virgin had signalled that drastic moves would be needed to make the airline profitable. Existing Tigerair bookings had all been shifted onto Virgin flights or refunded. Bain has said it will honour all employee entitlements, including those for Tigerair employees.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears regularly on Finder.