On Tuesday 21st April, Virgin Australia (VA) entered into voluntary administration to recapitalize the business and help ensure it emerges in a stronger financial position.

As you have a credit or booking with Virgin Australia you will understandably be concerned. Virgin Australia is continuing to operate scheduled flights as normal and has indicated that there is no immediate impact to customers with current bookings. They have also advised that whilst their frequent flyer program is a separate entity, they have put in place a 4 week pause on reward redemptions.

The status of refunds or travel credits is currently unclear, but if as indicated, Virgin Australia is seeking to trade out of administration, you would expect these to be preserved. There is no guarantee, however, that this will be the case.

The Travel Movement, and more specifically Travel Partners (whom power our business) will work closely with the administrators to support Virgin Australia through this process, and I will keep you informed of any developments and Virgin Australia policy updates as they come to me.

I thank you for your patience in these unprecedented times.

Virgin Australia (VA) Voluntary Administration

Overview and background

  • Like many of our valued partners, Virgin Australia’s domestic and international business has been hit hard during the coronavirus (COVID19) pandemic.
  • On 25 March 2020, VA halted 90% of its flights and stood down 80% of its workforce, maintaining just 17 destinations to transport essential services, critical freight and logistics.
  • On 16 April 2020, VA responded to a request from the Australian Government to resume flying an underwritten, minimal domestic schedule to transport passengers and keep important freight corridors open during the pandemic. 64 return services each week were started.
  • Virgin Australia had been seeking a temporary loan of $1.4 bn from the Australian Government to keep it’s business operational, however this request has been repeatedly rejected despite concerns domestic airfares would spike if Qantas was left to dominate the market (market monopoly).
  • The ASX placed an involuntary halt on Virgin’s trading on 16 April 2020.
  • Virgin Australia board members held a crisis meeting on Monday afternoon on 20 April. Following this meeting an ASX announcement was lodged Tuesday morning confirming Deloitte has been appointed.
  • The Virgin Australia Group has announced that it appointed the voluntary administrators to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis. The intention of the administrators is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible.

Virgin Australia (VA) FAQs

Updated 21 April 2020

What does Virgin Australia going into Voluntary Administration mean?

Voluntary Administration is a process whereby a company (Virgin Australia) is placed in the hands of an independent business known as a Voluntary Administrator (Deloitte) whose role is to investigate the company’s affairs and determine the best path forward for the company and its creditors. It offers the company an opportunity to restructure its affairs and there are a range of possible outcomes, for example entering into a Deed of Company Arrangement, Liquidation or be returned to the directors. The Virgin Australia Group has announced that it appointed the voluntary administrators to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis. The intention of the administrators is to undertake a process to restructure and re-finance the business and bring it out of administration as soon as possible. Velocity Frequent Flyer, while owned by the Group, is a separate company and is not in administration. The company has confirmed it is still operating all scheduled flights which are helping to transport essential workers, maintain important freight corridors, and return Australians home.

What happens to my Virgin Australia Credit?

According to a message on Virgin Australia’s Facebook page, your travel credits remain valid.

Will The Travel Movement / Travel Partners cover my booking / provide me with a credit?

Any future tickets and credit is held with Virgin Australia, not with The Travel Movement / Travel Partners.

Unfortunately due to the impact of the Coronavirus, we are not in the position to cover the costs of our customers’ bookings. However, Virgin Australia has communicated that ticket credits remain valid.

What happens if I have already submitted a refund?

If the refund has been processed by the airline and money is received by us from the airline, then we will refund the money back to you. For outstanding refunds, this is dependent on the Administrator. Generally, refunds can take up to 12 weeks to be processed and customer payouts will not happen until funds are received from our supplier.

If I can’t get a refund, can I get my taxes back?

This is dependent on the Administrator.

Will travel insurance cover anything?

As Virgin Australia is currently in Voluntary Administration, insurance does not cover this.

Can I do a charge-back as I paid with my credit card?

The customer has the right to ask their card issuer to instigate a charge-back against Travel Partners . Under normal circumstances this may be successful, however the RBA (Reserve Bank of Australia) issued guidance yesterday that credit card companies should be mindful of the pressure this places on travel agents. It is my understanding, that the ‘merchant’ in this process is us, so charge-backs may have a significant financial impact on our business, as the charge-back will be required to paid out by our business. For now, we suggest we just keep the dialogue open and work through this process together…

Why didn’t you tell me this would happen?

We are currently experiencing unprecedented change in the travel industry and are only able to provide the facts as we know them, at the time. When you asked me the question, I provided you with the most up to date information we had available to us.

I’ve purchased / hold tickets with another airline but after hearing about Virgin Australia, I’m feeling nervous… what advice do you have?

Our airline partners are going through exceptionally tough times, resulting from Government decisions around the world to dramatically restrict domestic and international border crossings, as well as the steep reductions in demand. All of our partners are currently reducing their cost bases to protect their models, so that when demand picks up,

they are able to scale. We have seen the majority of Governments across the world stepping in to offer financial assistance packages to enable airlines to meet their debt requirements as they trade through these conditions. FCTG & Travel Partners (the group in which The Travel Movement is a part of) are working closely with all of our partners and monitoring developments. The aviation industry has been through its fair share of challenges and our major partners are conditioned to weather this storm however we are not able to predict what may happen to any of our airline partners. We can only provide the facts as we know them and advocate on your behalf as your agent.

I have upcoming travel on an international ticket with a different airline and Virgin Australia has been issued on the domestic. What do I do?

We will know more once the Administrator has reviewed Virgin Australia.

I am flying onward to another destination within America and my internal sectors are on Delta… are those flights impacted too?

We will know more once the Administrator has reviewed Virgin Australia.

What happens to my Virgin Velocity Points?

In the ASX announcement, Virgin Australia confirmed Velocity Frequent Flyer, while owned by the Group, is a separate company and is not in administration.