The federal court has approved a proposal by the Virgin Australia administrator to offer restrictive “conditional credits” to Virgin Australia customers instead of refunds.
The new policy applies to Virgin Australia, Tigerair and Virgin Australia Holidays bookings made before the airline entered administration on 21 April 2020. Normal refund and travel credit policies – including the ability to get a refund for a refundable ticket – apply to bookings made on or after 21 April 2020.
Velocity Reward Seat bookings are not covered by this policy. In fact, you can still get a full refund with waived cancellation fees for Velocity Reward seat bookings made until 10 April 2020, for travel up to 30 September 2020. But refunds are not being offered for “Any Seat” rewards paid for partially or fully with Velocity points, which are covered under the new conditional credit policy.
Virgin Australia says that it has received around 340,000 requests for refunds due to flights cancelled in March and April.
What are Virgin Australia “conditional credits”?
According to the new Conditional travel credit policy for Virgin Australia Group customers, eligible customers may be entitled to a “conditional credit” if their flight was cancelled by the airline or they had a refundable booking. If the customer chooses to cancel or they have already received a refund, credit or other form of compensation, they are not eligible for a conditional credit (or any other remedy, it would seem).
The administrators will only guarantee that conditional credits will remain valid while the company is in voluntary administration. At this point, it is expected that this process will be completed by mid-August. It will be up to the airline’s new owners as to whether conditional credits will be accepted beyond this point. If they are not, those with unused travel credits will become unsecured creditors and will likely receive very little.
If you requested a refund or travel credit on or after 21 April, it is likely that you will now be offered a conditional credit in line with this new policy. You do not have to accept it. But if you do, the policy states:
If you choose to use the conditional credit in accordance with the terms set out in this policy, you will not be entitled to a refund or credit that may otherwise have resulted from the cancellation in respect of the Original Ticket.
The policy also states:
Where you elect not to receive a conditional credit, or do not use the conditional credit in the redemption period described above, you retain all of your general law and statutory rights against the relevant Virgin Australia Group Entity.
To redeem a conditional credit for a Virgin Australia flight, you would need to contact the airline’s Guest Contact Centre. (Alternatively, you would need to deal with your travel agent if the original booking was made with an agent.) The credit can only be used to book domestic Virgin Australia flights, including flights operated by Virgin Australia Regional Airlines.
Virgin Australia did not process any new refunds or travel credits since entering voluntary administration – something it only informed customers about last week. Under this new arrangement, the Deloitte administrators are relieved of personal liability for travel credits issued during the administration period.
Should I accept a “conditional credit”?
It’s really up to you. If you think you’ll be able to use your credit to book a Virgin Australia flight before August, this could be a possible way to retain the value from your original booking. However, the conditional credits come with severe limitations and restrictions. There is no guarantee you’ll be able to use the credit, nor that it won’t expire.
With little prospect of ever getting a refund, many Virgin Australia customers have now resorted to credit card chargebacks instead. However, according to a post on AFF, customers that are now eligible for a conditional credit may be ineligible for a credit card chargeback.
Claiming expenses on travel insurance, if you have an eligible policy, could be another possibility.
Sale process continues
As the Virgin Australia sale process continues, indicative bids are due tomorrow. Binding offers, meanwhile, are due on 12 June 2020.
A consortium including the Queensland government has emerged as one of numerous interested parties.
Join the discussion on the Australian Frequent Flyer forum: VA no longer issuing credits to travelbank (or anywhere else)