As the effects of the COVID-19 pandemic continue to ripple through the economy, Virgin Australia has sadly announced it has gone into voluntary administration. The company made the announcement after travel restrictions caused a 95% drop in air travel. It means thousands of people have lost their jobs and will have a huge knock-on effect on Australian tourism.
So, what does it mean for those plane tickets you bought, or your Velocity points?
Hear all the details about Virgin Australia’s announcement below:
What Actually Happened?
Because nobody is flying, Virgin Australia have become insolvent. They can’t pay off their debts – $4.8 billion to be exact – and are therefore being handed over to an independent party who can look at all the options they have available and decide where to go from here. In this case, the independent party is made up of administrators from Deloitte.
I Had A Flight Booked, Now What?
Virgin Australia have stated that while the company has gone into administration, certain routes, including transport for essential workers, freight corridors, and flights to return Australians home – will continue to operate.
However, if you’ve purchased a plane ticket and your flight has been cancelled, Virgin Australia has stated that “travel credits remain valid.” Unfortunately, it’s now up to Deloitte if those credits are honoured – and how they will be honoured under the new circumstances.
What About My Velocity Points?
The situation is a bit more complicated for Velocity members. Velocity is owned by Virgin Australia Group but it’s actually a separate company which hasn’t gone into administration. Once the announcement came through about Virgin Australia going into voluntary administration, the Velocity store crashed because so many people were trying to redeem their points.
Either way, we don’t have an official statement on what will happen with the Velocity points yet. It’s possible that any unused points will disappear – it’s happened before – but aviation experts have predicted that it’s more likely that Velocity itself will be bought out by a different company.
Unfortunately, we’re just going to have to wait and see what happens when it comes to the fallout of Virgin Australia’s devastating announcement. We can all help to rebuild society by supporting Aussie businesses and the tourism industry as much as possible when the lockdowns lift.
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