Virgin Australia Financially Secure? [Now in Voluntary Administration]

[jakeseven7]

Interestingly, it states "Velocity Frequent Flyer, while owned by the Group, is a seperate company and not in administration"

Although they seemed to have shut up shop temporarily anyway

 

[AisleSeat]

Richard Branson's letter to VA.

https://twitter.com/i/web/status/1252372377276563466

 

[jakeseven7]

Well its official now

Confirmed: Virgin Australia enters voluntary administration

Virgin Australia has finally confirmed to the ASX that it has entered voluntary administration.

australianaviation.com.au

 

[Cubiscus]

Interestingly, it states "Velocity Frequent Flyer, while owned by the Group, is a seperate company and not in administration"

Yeah I noticed that too, which should mean point balances are ok at least for now but VA redemptions will obviously be massively impacted

 

[jakeseven7]

Richard Branson's letter to VA.

https://twitter.com/i/web/status/1252372377276563466

Seriously tone deaf that guy, he's had sweet nothing to do with them lately apart from raking in the royalties for years. Being an owner in the past, he is also complicit in all of their poor decisions that helped lead them to this point and put the poor frontline staff in the position that he is writing to them about. Ugh....

He does realize that his ownership stake could well be wiped out and he would then have zero involvement right?

Sit down RB and go try and save VS.

 

[Cubiscus]

Him being based in the BVI paying no tax doesn't do him any favours with anyone, regardless of what he says.

 

[Must...Fly!]

The Virgin Group is a current stakeholder. Don't understand the hate, Virgin as a whole is only there because of him - he is perfectly entitled to say thank you and show determination to work through the issues and forge a path ahead.

 

[hada88]

Optimistic about VA. Devil will be in the detail though for us holding VFF points / travel bank etc.

 

[dajop]

He does realize that his ownership stake could well be wiped out and he would then have zero involvement right?

Not quite zero, if Virgin do emerge from administration, and choose to continue with Virgin Australia branding, then they will owe RB a royalty (which he is currently waiving due to COVID-19). IIRC, he's the only of the equity holders that has collected money directly from VA in the last 10 years, because of the brand royalty (not because of the equity).

 

[Scarlett]

 

[MarcB]

Interestingly, it states "Velocity Frequent Flyer, while owned by the Group, is a seperate company and not in administration"

What is certain is that as a wholly owned subsidiary, it is an asset of the business in administration and therefore its capital and cash will be fully available to the administrators. The administrators have to preserve the assets of the business (which includes the Velocity subsidiary) during the administration process which probably explains the suspension of redemptions posted on the Velocity website.

Program Update 21 April

experience.velocityfrequentflyer.com

Somewhat disingenuous to expect people to still accrue points they can't redeem though...

 

[Cubiscus]

You can still redeem for flights as of now....

 

[MarcB]

You can still redeem for flights as of now....

Not according to the Velocity website:

We’ve made the difficult decision to pause all redemptions for an initial period of four weeks, effective immediately. This means your members won’t be able to redeem their Points for rewards during the pause.

That bolding is their emphasis, not mine. Unless flight rewards are different?

 

[Must...Fly!]

Program Update 21 April

experience.velocityfrequentflyer.com

 

[antycbr]

Not quite zero, if Virgin do emerge from administration, and choose to continue with Virgin Australia branding, then they will owe RB a royalty (which he is currently waiving due to COVID-19). IIRC, he's the only of the equity holders that has collected money directly from VA in the last 10 years, because of the brand royalty (not because of the equity).

I suspect this will be on the table. If I was the Administrators I'd be saying - we move your royalty agreement to a percentage of PROFIT not a percentage of REVENUE. A rebrand is a massive cost which everyone will be seeking to avoid. He'd look like a massive a** if he didnt agree to this.

 

[antycbr]

Somewhat disingenuous to expect people to still accrue points they can't redeem though...

Wonder what direct sweep VA card providers - in particular Amex with cards like the AX Velocity Platinum - will do? Most people have a companion MC/Visa card and I know I have switched my spend mix away from the AX as my companion MC is the Qantas Premier Plat.

 

[Rembrandt]

Wonder what direct sweep VA card providers - in particular Amex with cards like the AX Velocity Platinum - will do? Most people have a companion MC/Visa card and I know I have switched my spend mix away from the AX as my companion MC is the Qantas Premier Plat.

Will one thing is for sure. It will be even more difficult to collect VA points (considering Covid-19) for at least the next 6 months whist VA is in administration. VA members and partners wont see the value. Most people will be collecting Qantas points wherever possible I think.

 

[ajnolan]

Hi Everyone,
I have a family trip booked from Melbourne to Port Douglas in late June - do I just sit tight and see what happens?
Is it likely I have lost my money and flights or can I get money back through bank chargeback?
Thanks,
James

 

[Borisdog]

Well, that's $1.2 billion of people's votes that will be remembering this government's inaction if it fails to support too.

I'd think that the pool of votes who DON'T have skin in the Virgin game is a tad larger...……...

I'm way more likely to remember a government that pissed good money after bad when the owners didn't do squat, and didn't do squat WELL before all this happened.

 

[tomlee1986]

Will one thing is for sure. It will be even more difficult to collect VA points (considering Covid-19) for at least the next 6 months whist VA is in administration. VA members and partners wont see the value. Most people will be collecting Qantas points wherever possible I think.

I agree with you - now that the airline miles can only be earned, but not redeemable, more people would go to the competitor where the points can be used in the future - and in this case, that would be Qantas