Virgin Australia customers would have existing travel credits or conditional flight credits replaced with “Future Flight credits” if the proposed sale to Bain Capital goes ahead. These would be valid to redeem for Virgin Australia flights until 31 July 2022, for travel until 30 June 2023, but would come with restrictions.
The sale to Bain Capital will be voted on at a final meeting of Virgin Australia creditors, scheduled to take place on Friday 4 September. In the unlikely event that the sale would not be approved, Virgin Australia may be forced to liquidate and customers would probably lose the value of any existing travel credits or flights booked.
The Future Flight Credits would be issued to customers with existing credits for cancelled travel that was booked prior to Virgin Australia entering voluntary administration on 21 April 2020. This includes customers with travel bank credits (which were issued before 21 April 2020) or conditional credits (which were issued after 14 May 2020).
Virgin Australia currently expects that Future Flight credits will be issued around 23 September 2020, although this is subject to change. In the meantime, you can continue to use travel credits and conditional credits to book new Virgin Australia flights.
How can Virgin Australia Future Flight credits be used?
Although the full details have not yet been released, we do know that Future Flight credits will be redeemable for flights operated by Virgin Australia. They will be valid for bookings made until 31 July 2022, and travel may be completed up to 11 months after this date.
But Future Flight credits cannot be used for flights operated by partner airlines, including codeshare flights. Bookings made using Future Flight credits will also be subject to limited seat availability within the fare class that Virgin reserves for Future Flight credit bookings. In other words, Virgin Australia will only make a certain proportion of seats on any given flight available for booking using one of these credits.
It is not yet entirely clear how this will work, although Virgin says bookings made with Future Flight credits will be subject to their own terms & conditions. It is expected that credits will be redeemable for flights in both Economy and Business class, but Virgin can expect a lot of unhappy customers if Future Flight Credits become too restrictive or difficult to use.
There is some information about these credits on the Virgin Australia website.
Given the circumstances, it is somewhat pleasing that Virgin Australia customers are at least being given an opportunity to use their flight credits under the new owners.
However, this does seem particularly unfair to customers that had booked expensive long-haul flights to Tokyo or Los Angeles. Many of these customers did not ask to receive a travel credit at all, and would have preferred a refund. With little prospect of Virgin Australia recommencing long-haul flights before the Future Flight credits are due to expire, and no opportunity to redeem these credits for partner airline flights, these customers will now be forced instead to either redeem for short-haul flights or forfeit the value of their bookings.
Virgin customers owed $550-650 million
Tens of thousands of Virgin Australia customers are owed an estimated $550-650 million after their flights were cancelled by Virgin Australia, or they were otherwise issued with travel bank credits in lieu of a refund.
Even a month before it entered voluntary administration on 21 April 2020, Virgin Australia’s policy had been not to issue refunds for flights cancelled due to COVID-19 travel restrictions. This has not been the policy of most other major airlines. Many Virgin Australia customers that had booked travel due to take place after the airline entered administration have since received credit vouchers instead of refunds – even though Virgin did not operate their flights.
Join the discussion on the Australian Frequent Flyer forum: Future Flight Credits