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Virgin Australia voluntary administration: Your questions answered

Posted: 21 April 2020 10:33 am
News

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With the airline in collapse, what happens to your flights, points and travel credits?

With flights grounded and a $5 billion debt on its hands, Virgin Australia has officially confirmed its voluntary administration.

The airline has been struggling heavily under the current COVID-19 travel bans. It first suspended all domestic services across its sister-company Tigerair, then drastically reduced its own international and domestic services.

Now, after placing a trading halt on its shares and failing to secure a $1.5 billion bailout from the government, the company has faced the music.

So what could this mean for you and your upcoming flight or Velocity Points? We discuss.

What happens to my booked flights?

Due to current travel restrictions, Virgin Australia had already cancelled the majority of its and Tigerair's upcoming flights. Any travellers booked on a cancelled flight were issued a credit note for use on a future service. Whether these credits will be honoured, should the airline successfully refinance or receive private financial assistance, is yet to be confirmed.

Anyone booked on a flight that has not yet been cancelled by the airline, should anticipate that this may not go ahead.

In the event that your flight is eventually cancelled, the administrator and airline have yet to confirm if a travel credit will be issued as compensation.

While this doesn't bode much confidence, if your flight is cancelled with no form of refund and you paid with a credit card, there is an option. Contact your credit card provider to recover the costs. As the purchase or service has not been provided, your provider can reach out to recoup the funds from Virgin on your behalf. If it can't, it may have to wear the cost itself.

Purchased a rewards seat? You may be able to cancel your flight, with penalty, and have these points reinstated to your Velocity account.

What happens to my travel credits?

As mentioned above, any travel credits you may have incurred from a cancelled flight may be honoured if the airline receives a private bailout.

You might also consider contacting your credit card provider to see if it can recover the voucher costs.

It's important to note here that Virgin Australia isn't grounding its fleet immediately. It plans to continue flying essential workers on its pared-back schedule of routes. If you are an essential worker, you may still be able to use your travel credits on these flights.

Those who aren't essential workers might consider forwarding their voucher on to an essential worker. While you won't be able to transfer it to them, what you can do is purchase the flight on their behalf and in their name.

Can travel insurance help?

Only a handful of policies offer cover when a travel service provider, like an airline or tour company, goes into administration or insolvency. If you purchased your flights using points, you may be able claim back the value of your frequent flyer points if you have this type of policy.

One thing that is unclear is if travel insurers will cover the event since it's related to COVID-19. It's always worth checking directly with your travel insurer to see if they can help.

What happens to my Velocity Points?

The answer at this point is up in the air.

While Velocity is owned by Virgin, it is a separate company and has confirmed that it's not in administration. This means that your points, for now, are safe.

However, due to the circumstances, Velocity has now paused all redemptions for a period of four weeks. In this time your points will remain in your account. You'll also retain any points due to expire during this period and you'll still be able to earn points.

Velocity points transfers to partner airline Singapore Airlines have also temporarily been suspended.

So, what will happen with your points? This will depend on where things go from here. All intentions are to continue a partnership with Virgin Australia. If this isn't possible, Velocity could potentially partner up with another airline or even a bank and your points transferred onto their programs.

Are other parts of Virgin, like Virgin Money, affected?

As of now, no. Only Virgin Australia as an airline and Velocity points are currently being affected by this.

If you have a Virgin Money insurance policy, you can still make claims as normal. You can also still sign up for new policies.

We'll update this page as we hear more.

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