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Virgin Australia – Voluntary administration and your frequent flyer points

You will no doubt have heard that Virgin Australia has gone into voluntary administration and its frequent flyer program is frozen.The big question is – will our points remain valid and will they hold their value?

 

All 9.8 million members of the airlines’ joint velocity frequent flyer program have been blocked from redeeming their ff points for at least 4 weeks.

Velocity is owned by the Virgin Australia Group but is a separate company and not in administration. Velocity continues to operate. Deloitte administrator Vaughan Strawbridge said anyone with future bookings “should be able to expect to fly” but he said the value of travel credits from cancelled bookings would be contingent on the restructuring negotiations. “We can’t provide a guarantee around those,” he said.

Velocity has reassured members that their frequent flyer points remain safe: “Your points aren’t going anywhere. They will remain in your account. Your existing points will not expire throughout this period. We will be extending the expiration period for your existing points by the timeframe of the pause. You can continue to earn points with our partners, although you won’t be able to redeem them during the pause”.

The Velocity frequent flyer program is an incredibly good asset and Virgin purchased the remaining 35 per cent state in the business last year for $700 million.

What has changed is our ability to cash in our points. Virgin has limited gift card purchases to one a day and may gift card options have disappeared completely. Virgin has also stopped the option for customers to transfer points across to Singapore Airlines.

Mr Paul Scurrah the managing director and Chief said “There was a run on frequent flyer program that we weren’t able to slow down and there was an increase in people wanting refunds which were unfortunate. Despite our efforts, we weren’t able to slow that down. We need to make sure we preserve as much value as we can as we go through this process”

Generally speaking, you don’t get great value out of redeeming points for products or gift cards. The best value tends to be for domestic seats.

There are two lines of thinking on this. The airline claims members points are safe to hold onto and some experts are urging consumers to spend up. But for now, consumers will need to sit tight and wait!




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