ACCC pressures Virgin to lift travel credit expiry [update - Virgin forced to extend]

[oz_mark]

At the end of the day, creditors voted in favour of the credit only on VA metal route. The other option was 10c maximum per dollar. The courts approved it.

It’s against the law for VA to go against this and issue refunds. Becomes a legal minefield the moment they issue one creditor a refund.

Sure it’s not morally right, but the consequences are quite considerable for the business should one creditor be refunded.

(By the way, you really think Bain give a flying rats about this lady?)

That's the problem = everyone in that group of creditors needs to be treated the same, so really the only options are to expire the credits, or extend the credits. I guess they need to draw a line somewhere

 

[justinbrett]

The court of public opinion doesn't care about these nuances.

And that's why normally in these situations, the company quietly settles to make the problem go away. How many other pensioners watching that story, who would have booked on VA, are now reconsidering?

I also think it's probably not a great idea to keep reminding people your airline recently went broke and lots of people lost money.

Just book her a flight on UA. It's not that hard. VA aren't paying UA retail prices.

 

[Must...Fly!]

The court of public opinion doesn't care about these nuances.

And that's why normally in these situations, the company quietly settles to make the problem go away. How many other pensioners watching that story, who would have booked on VA, are now reconsidering?

I also think it's probably not a great idea to keep reminding people your airline recently went broke and lots of people lost money.

Just book her a flight on UA. It's not that hard. VA aren't paying UA retail prices.

I think if this could've been done, it would've been done. The legal implications have been noted multiple times.

 

[justinbrett]

I think if this could've been done, it would've been done. The legal implications have been noted multiple times.

Rubbish.

VA is no longer under administration. If it wants to gift a flight to a pax, nothing stopping them. Call it bonus velocity points if you must.

There are ways.

 

[Must...Fly!]

Rubbish.

VA is no longer under administration. If it wants to gift a flight to a pax, nothing stopping them. Call it bonus velocity points if you must.

There are ways.

Again this point was made and again the legal implications were pointed out. The Virgin that this lady said emptied her super in to for tickets to the USA (that's a separate discussion I guess) no longer exists. It's as simple as that.

It's not fair but this is probably a rare example where the single digit cents or so in the dollar would've likely led to a better outcome.

Does anyone know what was the total value of FFCs issues by VA MK2? With approx $270m remaining, how many have been redeemed?

 

[justinbrett]

Again this point was made and again the legal implications were pointed out. The Virgin that this lady said emptied her super in to for tickets to the USA (that's a separate discussion I guess) no longer exists. It's as simple as that.

It's not fair but this is probably a rare example where the single digit cents or so in the dollar would've likely led to a better outcome.

Does anyone know what was the total value of FFCs issues by VA MK2? With approx $270m remaining, how many have been redeemed?

Nobody is arguing VA2 are legally obligated to help the woman.

We're arguing they should.

And again, if you want to keep pulling that "we're not the same airline" stunt with the public - that will backfire.

 

[Bagpuss]

Nobody is arguing VA2 are legally obligated to help the woman.

We're arguing they should.

And again, if you want to keep pulling that "we're not the same airline" stunt with the public - that will backfire.

No it wouldn’t backfire. Many people don’t understand the legal elements of administration and its process In which is the actual problem. Nor does Virgin state that, they are very careful with their wording.

To provide a full refund to an unsecured credit puts everyone in the same boat and every Australian company to have gone through the proces.

The correct response from Virgin Australia is to contact Deloitte who were the administrators.

 

[Bagpuss]

Awful interview with a blind pensioner tonight on ABC 730

She had paid $15K for return J tickets to LAX for herself and her carer to visit her family.
She wants a refund so that she can rebook and go on the visit.
$270 million expires on Dec 31st.

ABC 730 Report

Sorry for the harshness.
Was there any comment on her travel insurance?

If you totally drain your superannuation and savings, wouldn’t you have insurance?

There’s no comment in this article:

https://www.news.com.au/travel/travel-updates/travel-stories/virgin-australia-rejects-refund-for-blind-woman-desperate-to-fly-to-los-angeles/news-story/c17e5a394e058148a2d1deaa9d888c45

Karen is blind and wants to visit her family, but Virgin Australia won't refund her cancelled flights

Virgin Australia is sitting on hundreds of millions of dollars in unused COVID-19 flight credits, with customers who booked flights for routes the airline no longer operates being refused refunds.

www.abc.net.au

 

[justinbrett]

No it wouldn’t backfire. Many people don’t understand the legal elements of administration and its process In which is the actual problem. Nor does Virgin state that, they are very careful with their wording.

To provide a full refund to an unsecured credit puts everyone in the same boat and every Australian company to have gone through the proces.

The correct response from Virgin Australia is to contact Deloitte who were the administrators.

Yes it will backfire. I agree most people don't understand the administration process and they don't care. But keep reminding people VA went bankrupt and tickets were void - well what's stopping VA2 going bankrupt?

It's just not good for business. People want to know if they give money to an airline it will be safe. Remind them it's not, and they will think twice. The best thing VA can do is make this go away (don't need a monetary refund - just book the damn travel).

People didn't lose points in the administration process. Yes I'm aware velocity is a separate business, but it was wholly owned by VA1 and therefore an asset. Maybe Velocity can find some spare points for her.

All that being said airlines take pax for charity all the time.

 

[Princess Fiona]

Sorry for the harshness.
Was there any comment on her travel insurance?

If you totally drain your superannuation and savings, wouldn’t you have insurance?

There’s no comment in this article:

https://www.news.com.au/travel/travel-updates/travel-stories/virgin-australia-rejects-refund-for-blind-woman-desperate-to-fly-to-los-angeles/news-story/c17e5a394e058148a2d1deaa9d888c45

Karen is blind and wants to visit her family, but Virgin Australia won't refund her cancelled flights

Virgin Australia is sitting on hundreds of millions of dollars in unused COVID-19 flight credits, with customers who booked flights for routes the airline no longer operates being refused refunds.

www.abc.net.au

Don’t think they mentioned TI but insolvency of an airline is an exclusion in almost all policies.

 

[jakeseven7]

Don’t think they mentioned TI but insolvency of an airline is an exclusion in almost all policies.

Correct and has been forever and a day, nothing new there.

 

[nlagalle]

Sorry for the harshness.
Was there any comment on her travel insurance?

I’m not aware of any TI that covers an airline going under.. are you?

 

[Bagpuss]

Yes it will backfire. I agree most people don't understand the administration process and they don't care. But keep reminding people VA went bankrupt and tickets were void - well what's stopping VA2 going bankrupt?

It's just not good for business. People want to know if they give money to an airline it will be safe. Remind them it's not, and they will think twice. The best thing VA can do is make this go away (don't need a monetary refund - just book the damn travel).

People didn't lose points in the administration process. Yes I'm aware velocity is a separate business, but it was wholly owned by VA1 and therefore an asset. Maybe Velocity can find some spare points for her.

All that being said airlines take pax for charity all the time.

So say Virgin state they extend the credits for 2 years. They won’t be flying internationally to the USA in two years. The backlash will happen again in two years.

If this was a customer who was wealthy would you be up in arms about it ?
This is unfortunately identifying an unfortunate story.

 

[Bagpuss]

Don’t think they mentioned TI but insolvency of an airline is an exclusion in almost all policies.

This probably depends on the insurer. Has it been tested ?
Virgin Australia continued to operate but they actually ceased flying.
So put it anther way in this story it would be RIGHT for a insurer not to honour an insurance claim due to T&C’s but WRONG for Virgin Australia not to give a refund after voluntary administration which was a process which doesn’t cater for unsecured creditors?
Cause to me that’s a bit dual standards.

Also what about the companies who lost millions or dollars? Or people who lost thousands in shares etc?

 

[Princess Fiona]

This probably depends on the insurer. Has it been tested ?
Virgin Australia continued to operate but they actually ceased flying.
So put it anther way in this story it would be RIGHT for a insurer not to honour an insurance claim due to T&C’s but WRONG for Virgin Australia not to give a refund after voluntary administration which was a process which doesn’t cater for unsecured creditors?
Cause to me that’s a bit dual standards.

Also what about the companies who lost millions or dollars? Or people who lost thousands in shares etc?

It’s an exclusion in all of mine.

 

[Bagpuss]

The whole FFC is an unwinnable situation.
Through the voluntary administration process company’s would have lost up to millions, individuals would have lost thousands of dollars through air fares, shares, unsecured bonds as well as job losses.
I’d also say there would be a group of people who would had their personal life’s ripped apart. There would be hundreds of cases here.
Today you still see it in employees who are fighting for better pay and conditions as a result of accepting cut backs during administration.
You may find that if you contact Virgin for FFC’s in line with some company procedures you go to a dedicated 3rd party call centre to protect Virgin employees from customer abuse and specialists who can handle the situation.
There are obviously ways to help customers say they won the 1 point velocity international trip. But then the customer doesn’t want to travel any more.
It’s an unwinnable situation and this is one of many people disadvantaged. If it was a wealthy person on the program hardly anyone would have cared. Though this isn’t about one person really it’s about thousands and they all need to be treated exactly the same.

 

[justinbrett]

So say Virgin state they extend the credits for 2 years. They won’t be flying internationally to the USA in two years. The backlash will happen again in two years.

If this was a customer who was wealthy would you be up in arms about it ?
This is unfortunately identifying an unfortunate story.

Again that's just rubbish. They're codesharing now. They're allowing people with velocity points to redeem on UA now.

This can be fixed now.

This is the problem with continuing the VA brand. They're trying to have the best of both worlds. Maybe it should have been like Ansett where the remains were sold off, everybody got a share of what was left, and that left room in the market for a new airline to form.

They had money to keep all the Velocity balances. I'd argue keeping/refunding cash bookings should have been a priority over that.

 

[oz_mark]

They had money to keep all the Velocity balances. I'd argue keeping/refunding cash bookings should have been a priority over that.

Velocity did not go into administration, so it's a bit irrelevant what happened there.

 

[Bagpuss]

Velocity did not go into administration, so it's a bit irrelevant what happened there.

Yup and much to the disgust of the shareholders such as Singapore Airlines who were hoping to get some money back based on the valuation of Velocity.

 

[justinbrett]

Velocity did not go into administration, so it's a bit irrelevant what happened there.

It was 100% owned by VA1 and therefore was an asset of the administration. It's completely relevant.

Also what about the companies who lost millions or dollars? Or people who lost thousands in shares etc?

You can't compare losing money on an investment with paying for a service you don't receive.

There are inherent risks with investments and everybody goes in with their eyes open. Nobody reasonably expects to sink 15K into an airline not to fly. If it went bankrupt like Ansett sure, that's tough - but when it continues trading, there is a moral responsibility to honour bookings.