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

[jakeseven7]

Some great news for people struggling to use their travel credits with VA2.

——

ACCC pressures Virgin to lift travel credit expiry

Virgin Australia has buckled under pressure from the consumer watchdog to extend the life of $120m worth of Covid related travel credits beyond December 31.

The airline stopped short of matching rival Qantas who recently allowed passengers to have their credits refunded with a Virgin Australia spokesperson confirming “There is no option for travellers to have their credits refunded”.

Multiple stories:

https://www.theaustralian.com.au/business/aviation/virgin-australia-under-pressure-to-lift-travel-credits-expiry-date/news-story/01590482ebea8733021ee33598694902?amp&nk=79d04ffd1ec92b85854d0146a61cafdf-1695470253

Never doubt an airline’s thirst for a desperate fan’s last buck

Just a few weeks after empathising with customers over their cost-of-living pain, Virgin’s hypocrisy has been laid bare as footy fans ache to see their team.

www.brisbanetimes.com.au

 

[odysseus]

The second is an interesting article, regarding pricing.

There's some days I'm looking at next year for some time, and Virgin has consistently been priced above Qantas for the same main route for months, average about $100 more. So much for them being the value option (ie. prices vary, but Qantas have many primeish times around $150, and VA are $260-280).

 

[ajd]

Damn, you had me excited for a moment. Executive Traveller is reporting that this doesn't include FFCs: Virgin Australia extends travel credit expiry to mid-2025

(I have $1,500 in FFCs left over from a cancelled trip to XCH/CCK...)

 

[pauly7]

Damn, you had me excited for a moment. Executive Traveller is reporting that this doesn't include FFCs: Virgin Australia extends travel credit expiry to mid-2025

(I have $1,500 in FFCs left over from a cancelled trip to XCH/CCK...)

Colleague at work is in same boat as you. I don’t know why they couldn’t just extend them all.

I actually think Virgin refusing to refund credits is telling as well…

 

[ajd]

Colleague at work is in same boat as you. I don’t know why they couldn’t just extend them all.

I actually think Virgin refusing to refund credits is telling as well…

I assume it's because Bain already took a big loss in taking on FFCs rather than simply treating customers as any other unsecured creditor, and by the magic of corporate insolvency they're certainly not legally obliged to be flexible... but that's a problem for VA, not for me.

Anyway, now to find somewhere I can go which will burn $1500 in the next 3 months that also has FFC availability. I do want to do that trip to XCH but maybe not this year...

 

[Must...Fly!]

Colleague at work is in same boat as you. I don’t know why they couldn’t just extend them all.

Surely if you were trying to still sell the business, it's the only sensible thing to do.

 

[pauly7]

Surely if you were trying to still sell the business, it's the only sensible thing to do.

I’m actually unsure of the burden of these credits Bain is carrying…. And exactly how they have treated them financially in the wash up of the collapse of Virgin.

It could well be that they can’t afford it (as in the entity now known as Virgin mark 2, obviously Bain could afford it and could inject more money in to cover them if required!)

 

[jakeseven7]

All of this was on talk back radio today - people were calling up to get refunds and being told no - assuming because Qantas are offering it, VA2 should be too.

 

[jakeseven7]

Surely if you were trying to still sell the business, it's the only sensible thing to do.

Well VA2 disclosed that it’s almost $300 million in credits that expire end of year that they refuse to extend, or offer a refund…

So come Jan 1, Bain’s internal ‘balance sheet’ for VA2 will look a lot healthier when the second big sales push try and sell VA2 off gets started…

That’s a lot of money, there’s no wonder they don’t want to give it back to customers!

 

[Must...Fly!]

What's to give back.

Being realistic, they're lucky they got any chance to use their credit(s), unfortunately.

 

[pauly7]

What's to give back.

$300 million…

Which is precisely why it’s not being given back.

Being realistic, they're lucky they got any chance to use their credit(s), unfortunately.

It was a real mess of time, agreed. Personally I feel most sorry for the staff. Many of those who are left are still having a rough time.

 

[Bagpuss]

All of this was on talk back radio today - people were calling up to get refunds and being told no - assuming because Qantas are offering it, VA2 should be too.

Virgin's situation is a bit more complex.

You have Future Flight Credits, they wont be extended as it's pre-administration and was good will to give customers who had bought tickets 100% of the value back. Before people, complain about this simply put this was approved by a court system.

The covid credits are tricky mainly because there's during administration and post administration which have been bundled into one. So it's complex. The ACCC have already agreed that Virgin has done the right thing by extending standard credits to 2025. So there's no point arguing and accepting it for what it is.

 

[Ausbt]

I've got a daughter who was supposed to attend Schoolies on the GC in 2020 and whose cancelled flight got travel banked. She rang VA 18 months later and they said "sorry, it's gone". I scolded her at the time for being so slack. Lo and behold she chased them harder and they reinstated the credit, but I suppose the real story was they were forced to. Anyway, the credit still stands and I believe will be expiring this December, but she still hasn't booked a flight with it! Kids, huh?

 

[Bagpuss]

I've got a daughter who was supposed to attend Schoolies on the GC in 2020 and whose cancelled flight got travel banked. She rang VA 18 months later and they said "sorry, it's gone". I scolded her at the time for being so slack. Lo and behold she chased them harder and they reinstated the credit, but I suppose the real story was they were forced to. Anyway, the credit still stands and I believe will be expiring this December, but she still hasn't booked a flight with it! Kids, huh?

Credits were extended. At one point a lot were deemed to be expired, for them to be reinstated.
I don't think airline system sabre, amadeus etc. were ever designed around mass credits and extensions etc.

 

[oz_mark]

$300 million…

Which is precisely why it’s not being given back.

ALthough in the case of Future Flight Credits, it's not really about giving back, as that money had gone up in smoke during Administration

 

[oz_mark]

All of this was on talk back radio today - people were calling up to get refunds and being told no - assuming because Qantas are offering it, VA2 should be too.

My understanding of the Qantas situation is that after the end of the year, there's a system limitation which will prevent the credits being used to make bookings. Hence, refund is the only real option they have.

 

[Bagpuss]

ALthough in the case of Future Flight Credits, it's not really about giving back, as that money had gone up in smoke during Administration

Actually Future Flight Credits are pre-administration. So in reality Virgin Australia, the company today never received that money, it's a liability on their financials.

Really if you have a FFC, Virgin Australia 1.0 received airport taxes etc. and that money was held by the company.

If you redeem FFC's it is costing the company as it includes the taxes as well as the flight, the flight side is hedged by the availability.

I think people give the current company a hard time over this. Though appreciate you need to have a level of administration knowledge.

If you ask many people who've been through company administration, they would normally say so many things hamper the company due to going into administration.

 

[oz_mark]

Actually Future Flight Credits are pre-administration. So in reality Virgin Australia, the company today never received that money, it's a liability on their financials.

I probably should have said the money went up in a puff of smoke, the moment it was put into administration. At that point, ticket holders etc became unsecured creditors.

 

[dajop]

I guess, as when you take over the brand after administration, a big part of the value lies in the brand itself. The average customer cares nought for the intricacies of administration and that they are unsecured creditors. They see the same brand, and that spend by VA on extending travel credits is very much and investment in support for the brand, nothing more, nothing less. Probably good investment to keep the attention on your competitor and away from your own failings....

 

[pauly7]

I guess, as when you take over the brand after administration, a big part of the value lies in the brand itself. The average customer cares nought for the intricacies of administration and that they are unsecured creditors. They see the same brand, and that spend by VA on extending travel credits is very much and investment in support for the brand, nothing more, nothing less. Probably good investment to keep the attention on your competitor and away from your own failings....

I don’t disagree with you but I think they’ve run the ruler over it in a meeting dominated by Bain bean counters and said nope no way and we can weather the brand damage for $300 million thanks very much!