Virgin Australia has gone into voluntary administration after crisis talks with both the NSW and Queensland governments failed
https://www.abc.net.au/news/2020-04-21/virgin-australia-goes…
Will we end up with lack of competition and very overpriced Qantas/Jetstar flights for domestic flights?
Nope.
Chargeback. While you still can.
Do you think Qantas will go next?
Never. The government would never let it happen, and they're in a strong profitable position.
Ive got a business class flight to the UK booked with Virgin. I suppose that might be lost??
Voluntary administration doesnt mean the business stop operating immediately. It could be a while before it is declared bankrupt.
Virgin Australia don't fly to the UK!
It's a codeshare booked through VA, if that makes things better?
Goodbye 600k in points…
Why would you not iust buy something in the Velocity store?
If you can get on the site, you'd be lucky if it was actually honoured at this point.
@nightelves: I probably hit the refresh button 50 times as soon as my page loaded with an error message.
(I didn't use wifi, I hot-spotted myself. My wi-fi is way too slow to keep up with the influx of people on the page)
Good thing is, there's one less person for you to worry about. I've now redeemed all my points since the start of April (with about 3000 points remaining that I can't do anything with). Haven't received anything in the mail yet though, they say 14 working days, I'm on my 6th working day because of all the public holidays.
My personal opinion, I would rather redeem and might get nothing, than not redeem and definitely get nothing.
At one gift card redemption per day, maybe make a decision sooner rather than later as it appears gift cards do sell out
Thats rough mate. Did you redeem any at all in the past few weeks?
ouch.
tell richie to stop flying to the moon and.bail out ur airlinr
Are you still able to redeem Singapore Airlines Flights?
They disabled the krisflyer redemption path a week or so ago, if thats the path you were hoping for.
I thought that was only for krisflyer transfers,not mile redemption directly through the website (?)
Yep, I don't have an answer otherwise on direct redemption. I'd imagine its risky anyway from the way people have talked on the AFF forums.
Hi folks,
This is a bit of a 'what if' question as Virgin is in voluntary administration rather than completely folded at this stage, but the future looks a bit grim.
Can anyone shed light on what happens with the travel focused credit cards that offer things like free flights and lounge passes as part of the annual fee? If the credit card provider is no longer able to offer those, is there a potential for a refund for the annual fee?
What do the T&Cs you accepted say in case of such an event? There'll be something in there.
Are the perks just added, or does it stipulate that the annual fee includes these features?
Explicitly states that the annual fee covers these.
All benefits are lost. There are no refunds.
The company is broke.
You'd be chasing cents in the dollar.
Flights etc are offered by the bank that offers the card, not directly from Virgin.
i doubt it.
feel for the residents of xmas and cocos islands they are now stranded
Isn't the government giving $200 000 000 taxpayers' money to keep them alive? Or am I a bit behind on the news.
Behind on the news
No just didn't read Behind the News Headlines.
We have no idea how long before people can start to really fly again, and whether they will collectively be able to afford it, and when will overseas tourists arrive. Qantas will probably struggle for a few years even if they are the only airline (planes pay for themselves when full)
And as Ss-ss says below its 90% owned by overseas airlines, we would be better off paying the staff directly rather than give money to overseas companies to then give to the staff.
Thanks for the info.
This bail-out really doesn't make sense since Virgin Aus. is a private company and not a government body AND, like you said, almost completely owned by overseas airlines!
@Blue Cat: Exactly, Virgin Australia is partly owned by Etihad, the flag carrier of the UAE and owned by the UAE/Dubai government. They are loaded with money.
Other owners are China backed airlines and Singapore airlines.
This owners are not struggling for cash. Especially Etihad and the Chinese airlines.
We should be asking for part ownership in Virgin Australia and not just give away taxpayers money to them for nothing. Otherwise it’s a free cash bailout to large corporations disguised as helping an “Australian airline”.
@emoticon: The Chinese airlines are not struggling for cash? Are you mad? One of those two Chinese airlines just went insolvent themselves and the Hainan provincial government put it into involuntary administration.
They offered 200m, they want 1.4 billion. For a company worth 700 million with 5 billion in debt already I can't help but think these jobs will be lost sooner or later regardless unless their foreign owners and debtors excuse their current debts (or at least a good portion of it)
It’s a bluff Virgin Aust is owned by Etihad & Singapore airlines. The government wants the parent companies to bail them out rather than taxpayers money. So they are calling vol administration and a potential 10000 jobs gone which the gov will have to pay unemployment benefits and receive no tax from these people. It’s a big cost either way.. We’ll see how it pans out.
This is a serious game of chicken or texas holdem poker and I think SQ/EY are willing to play for broke. Just because they have deep pockets does not mean they need to top up money towards VA/TT. 16,000 or so jobs will go as a result.
And $1.6 Billion would last for how long, and how many jobs would be saved. You like everyone else is assuming the $1.6B to save the airline means it will be back to full flights and full planes.
After all this QF/JQ will be struggling to get back to full flights even if it was the only airline.
Also factor in the loss of jobs at airports.
@RockyRaccoon: Not a bluff. Singapore and Etihad only own around 20% each of Virgin.
Voluntary administration is probably the best outcome for Virgin. Virgin was already struggling under massived debt, and further debt (government loan or otherwise) would have crippled it. With voluntary administration, shareholders and unsecured bond holders will suffer but the airline can be reborn with a sustainable balance sheet.
@dct: Agreed. $5b in debt is no joke. Not even sure how upper management in Virgin let it get that bad. If the federal government bails them out, we will be paying for it in increased personal taxes for years!
@Flowerbomb: Upper management did it deliberately in an ill guided attempt to become a "Qantas Lite" rather than the "Jetstar Plus" it was founded to be. The new CEO after Borghetti left had been trying to turn it around but it's like turning the Titanic, and this pandemic couldn't have come at a worse time for them.
Most of the liabilities on the books are bond issues, thankfully, which mature a few years down the track, and under administration they are actually not required to be paid.
International travel is dead for the next year or more, so the jobs are basically gone anyway.
is there a potential for a refund for the annual fee?
Not at all. Read the T&Cs
What about the velocity points.. will they all disappear?
Yes
Maybe.
No, Velocity Frequent Flyer is a separate company and has not entered Administration. It is owned by Virgin, but i'd imagine it would be treated like an asset.
I'd imagine the main point of this period of administration is to get rid of some of their leases and loans that have become a problem to the airline. I don't expect Virgin to be liquidated.
Just managed to buy a Dyson stick vac. Time to keep shopping.
Horrible for all the people and their jobs, awfully stressful even if there is a last minute bailout.
I have a $4k credit from travel that was cancelled due to COVID. What do you think my chances are of getting it back?
did you have insurance? If so, speak with them - can't hurt.
Most (all?) travel insurers don't cover airline insolvency.
Yes I did - just the regular insurance you add to tickets - which doesn’t cover cancelled flights for pandemics!
I have a $4k credit from travel that was cancelled due to COVID. What do you think my chances are of getting it back?
Youch, very unlikely unfortunately.
Try get a refund asap, maybe through your credit card.
Singapore Airlines should just buy it already and put it in the Star Alliance. That should make it competitive against Qantas.
no company in their right mind would buy such a huge debt with no cash flow for the forseeable future
better to let them go insolvent, hit the reset button on the debt and resell afterwards
best case air line travel wont be normalized for 6 months but realistically we are looking at 12 months plus
It would likely have helped Virgin in 3 ways to be part of SkyTeam or Star Alliance; Star Alliance would have been preferable (due to the bigger network, with just Singapore Airlines / Lufthansa / United alone you can see most of Europe and the states). That way Velocity points would been more attractive because 1) they could be redeemed for travel worldwide, and 2) earned worldwide, plus 3) it would have fed customers into their flights.
Without this, it led to weird situations, such as Lufthansa's RTW ticket (who are a Star Alliance airline) fed into Qantas flights (from the competing oneworld alliance) to/from/within Australia (as one of the options, but usually the best one) - simply because there currently is no Australian Star Alliance airline. Virgin missed out on those RTW customers.
Three of the airline owners are Star Alliance members. They couldn't join SkyTeam if they wanted to.
Only one owner is Star Alliance, namely Singapore airlines. Qingdao Airlines / Nanshan Group is not, and Hainan Airlines / HNA Group is not, and Etihad is not, and Virgin Atlantic / Virgin Group is not. And Air New Zealand are, but they are no longer shareholders, and former owners don't get a say.
Singapore has its own trouble. They're going cap in hand to the market to raise money themselves.
just got into the store and got myself some pots lol, persistent and loading multiple pages
I used to buy cheap (avg $180 )Sydney-Perth flights during Virgin sales
now will end up paying a lot more 🤦♂️
Well there is going to be a lot of empty planes sitting around with nothing to do.
Maybe they will focus on domestic routes (as that is the only option) and there will be more competition.
Competition between Qantas and his car?
Most of Virgin's fleet is leased. The lessors will reclaim those planes.
They don't cease to exist though. Unless they sitting idle they will be flying domestic routes.
@trapper: No, they'll be returning to the lessor, which is an overseas company. Yeah, sure they'll be flying domestic routes - Domestic US…
realistically that is a key part of the problem, Virgin have been selling fares below cost and losing bucket loads of money. We almost certainly will be paying more after this regardless of whether Virgin survives or not, but I am not sure that is a bad thing entirely, you can't expect a business to remain viable selling products at a loss. Covid 19 just brought forward a problem for Virgin that they were headed for anyway.
Everyone redeeming their points or trying to the unfortunate part is you left this way too late. This needed to be done before last week, at a minimum. Anyone who placed orders before 10 april likely may receive fulfilled items but let's be honest - any orders placed today won't get honoured by suppliers. Why would they? The wine store is now offline and thid last week's of orders likely wont get honoured.
I thought i was late cashing in last week but surprised so many ozbargainers have held onto points all the way until now?? Am i missing something or were people asleep at the wheel assuming the govt would never let virgin go under?
My thoughts exactly. We cashed out all our points 4 weeks ago, back when you could order $500 gift cards. Could see this coming a mile away.
Virgin were on the verge of collapse long before Covid19 (during a time where the majority of airlines where actually doing well).
In the last year they increased passenger numbers and miles flown yet lost more than ever.
They had about $4b revenue for a net loss of about $100m and debt at 6.5x (over $5b in total) crazy stuff.
I genuinely feel for the workers and somewhat shareholders (although they must have known the risk/reward proposition) but I strongly support the government on their stance.
Why should the taxpayers buy out the company or bailout the company with a line of credit or guarantee that most likely will never be paid.
There are plenty other airline corporations that can run the company much more effectively. Fast track the ownership transition once the foreign creditors are out of the picture.
There are 3 Chinese carriers, RyanAir, AirAsia and the owners of Frontier in the USA all considering the option to make a play for the airline.
Virgin or it's future brand will likely emerge stronger and a much more competitive airline as a result.
Perfect example imo, they sold 35% of velocity for $330m in Oct 2014 and just bought it back at double the price in July (for $700m). They have never had great management.
If people think that Tiger has a dodgy reputation, just wait until Ryan Air is in the picture 😱
1 cent flights though.
They have never had great management.
Strange because the previous CEO was a high up exec at Qantas… yet came to Virgin and ran it into the ground?
He got passed over the top job by Alan Joyce so he jumped shipped to VA… looks like Qantas choose well.
Very well since he basically ran the competitor into the ground over several years, LOL.
Maintaining and expanding an incumbent dominant airline, versus starting a brand new airline, are vastly different propositions, with very different levels of risk. Joyce obviously thinks he's God's gift, but actually his performance is rather "meh" given the extreme head start he had, or even compared to Dixon who came before him (who delivered far better results doing the same job). Just my $0.02!
@nickj: Maybe someone should offer Rob Fyfe the job (the guy who turned around Air NZ from bailout recipient to hugely profitable behemoth).
@nickj: I dont think he had a head start, i recall all domestic airlines werent doing too well but they could only go up really since the gfc.
The real test comes now and the upcoming months/years and how they recover.
Time to buy Qantas shares :D
Here goes the value of my Qantas FF points.
A lot of people have a lot of misunderstanding on what happens when a business like virgin goes into voluntary admin. See youtube video to understand. PE firms have already expressed interest in buying out the firm. Those staff pleading at the airports are so silly hahaha. Nothing will happen to their jobs, just change of board of directors and very senior upper management.
https://www.google.com/url?sa=t&source=web&rct=j&url=https:/…
That's the most likely scenario - buyer will scoop up a bargain but you'd have to expect a massive overhaul/restructure. This will result in a large chunk of fat being trimmed either way.
Which is good. Inefficiencies being weeded out of a highly regulated industry.
A bunch of them will lose their jobs as unprofitable routes are cut. Less routes == less staff
Yes, that might be a possibility but its not as bad as the media is portraying it to be.
They could be a fraction of their size after this. Tiger could go completely, International completely, and Domestic trimmed to a few profitable routes. I don't agree that nothing will happen to their jobs. It's possible that most of them could go.
@dazweeja: I don't feel any sympathy for the pilots and engineers losing their jobs though. They would have been on very generous salaries for a very long time and had every opportunity to save. The flight attendants and admin staff on the other hand I feel sorry for.
It seems the store to redeem points is now gone. It redirects back to the experience page when clicking the link to shop.
ASX Announcement https://www.asx.com.au/asxpdf/20200421/pdf/44h3kq7kcb12fl.pd…
It also says "Velocity Frequent Flyer, while owned by the Group, is a seperate company and not in administration".
No. Virgin are making a big deal out of it to get a bailout from the govt. I hope the govt. stands firm and does not bail them out.
I would prefer we pay that money to those workers with virgin who will lose their jobs ( or lost em already) as opposed to the company itself.
What happens to the travel credit/travel bank which I received. :(
most likely outcome is not good news
I'm prepared to say bye bye to my $800 travel credit.
I waited for 2 months for virgin to cancel our flights but they didn't. So I end up having to cancel the booking myself and not being able to get a refund. Not happy about that at all :(
If they don't come out of VA as a business, yes, if they come out restructured and operating, no.
Heya folks,
Looks like Velocity have posted an update regarding points.
We will be unable to redeem points for 4 weeks.
Also What our members need to know:
· Your Points aren’t going anywhere. They will remain in your account.
· Your existing Points will not expire through 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.
· These changes take effect immediately. Although the initial timeframe for this restriction is four weeks, this period may be extended. We will come back to you with an update as soon as we can.
Full info at:
https://experience.velocityfrequentflyer.com/member-support/…
For those of us who still have points, not much we can do but wait.
That's better news than I expected……..
They should be called New Velocity Points in homage to Zimbabwean redenomination.
I have a flight that I booked through trip.com on Virgin that I cancelled due to covid-19. Reckon I'll get a refund or at least some sort of credit after this?