Virgin Australia outrages customers with shock decision on refunding frequent flyer tickets
- Virgin Australia frequent flyer members are still waiting for refund of points
- Administrators put a hold on refunds for Velocity tickets despite no-one flying
- Virgin said frequent flyer tickets would receive a full refund of Velocity Points
- But many customers are yet to see any refunds or any money back for the tickets
- Here’s how to help people impacted by Covid-19
Virgin Australia customers are furious after the airline's administrators put a hold on refunds for frequent flyer tickets even though the flights in question never went ahead.
The airline's frequent flyer scheme, Velocity, paused refunds for flights grounded by the coronavirus pandemic after the business went into voluntary administration on April 21.
Last month Virgin told customers that anyone who had their frequent flyer tickets cancelled would receive a full refund of their Velocity Points.
They were also told they would not be charged a cancellation fee and would be refunded for the taxes, fees and charges paid for the ticket.
The airline's frequent flyer scheme, Velocity, paused refunds for flights grounded by the coronavirus pandemic after the business went into voluntary administration on April 21
Virgin Australia customers are furious after the airline's administrators put a hold on refunds for frequent flyer tickets even though no flights went ahead
But some of the airline's top frequent flyers have not seen any money for those taxes and charges, The Australian reports.
Velocity is planning to communicate with frequent flyer customers who have been affected by the issue soon.
'Once the administrators authorise us to make payments again, the tax refunds will be processed,' Virgin wrote to a Platinum Frequent Flyer member.
Some platinum members have been waiting more than a month to be refunded hundreds of dollars in flight taxes.
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On Tuesday a spokesman from the airline's administrator, accounting giant Deloitte, said all efforts are being made to process refunds and taxes to Velocity members as quickly as possible.
The publication reported one couple are owed up to $800 in taxes for a trip to America in March but their travel agent was so fed-up with Virgin's refund process they were instead claiming the money through travel insurance.
Deloitte put a hold on all refunds and travel credits last month for flights that never went ahead.
Administrator Vaughan Strawbridge instead sought to compensate passengers with 'conditional travel credit' rather than cash refunds in an affidavit filed to the Federal Court.
Some of the airline's top frequent flyers have not seen any money for the taxes and charges paid towards tickets despite not flying
The travel credits will include the price of the ticket and taxes paid.
Deloitte received 340,000 refund requests from customers since it took control of the cash-strapped airline after 65,000 flights were cancelled between March 1 and April 30.
Customers who have not claimed or used their credits during the process will be 'unlikely to receive a 100 per cent refund on any restructuring or upon liquidation'.
'The Conditional Credit scheme offers those customers the possibility of realising 100 per cent of the value of their refund by using the credit on a future flight or holiday package,' the court application states.
Mr Strawbridge added credits were 'necessary to preserve as much goodwill associated with the Virgin brand and business as possible for a buyer'.
A spokesman from the airline's administrator, Deloitte, said all efforts are being made to process refunds and taxes to Velocity members as quickly as possible (Chief Executive Officer of Velocity Frequent Flyer at Virgin Australia Karl Schuster pictured)
The decision on whether to honour Virgin travel credit or give customers a refund will be up to the airline's new owners.
'Potential buyers may be motivated to extend these conditional credits as part of any restructuring or recapitalisation of the Virgin Companies' business for the purposes of maintaining and enhancing the customer goodwill associated with the Virgin Companies,' Mr Strawbridge said.
Of the 19 parties that have expressed interest in buying the airline, eight signed confidentiality agreements to gain access to Virgin's books.
Apollo Global Management, Oaktree Capital Management, Indigo Partners, and BGH Capital are among the potential buyers.
The court application also seeks to limit the administrators' liability for debts incurred from Virgin and for essential services such as ground handling, fuel, maintenance and in-flight catering.
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