Virgin Australia imposes new restrictions on travel credit

Future Flight Credits will replace Virgin Australia Travel Credits and Conditional Credits, but they'll be more difficult to use.

By Chris Chamberlin , August 28 2020
Virgin Australia imposes new restrictions on travel credit

If you've booked a Virgin Australia flight that ended up being cancelled, there's a good chance you'll hold either a Travel Credit or a Conditional Credit – both of which will soon be replaced by what the airline terms Future Flight Credits.

Outstanding Travel Credits and Conditional Credits will be reissued as Future Flight Credits under new airline owners Bain Capital.

The concept is the same – a credit voucher for the amount of money you spent on tickets, which can be used for to book a future Virgin Australia flight – but there's more to this than just a change of names. 

While Travel Credits and Conditional Credits could previously can be applied towards any Virgin Australia airfare, the use of Future Flight Credits will be far more restrictive.

Only a certain number of seats on any given flight will be set aside for purchasing with your Future Flight Credit, meaning there's no guarantee you'll even be able to get on the flight you want.

Here's what you need to know about Virgin Australia's new Future Flight Credits.

What are Virgin Australia Future Flight Credits?

Virgin Australia's Future Flight Credits will ultimately replace both the airline's existing Travel Credits, and Conditional Credits.

(Travel Credits are those issued prior to the airline's entry into Voluntary Administration, while Conditional Credits are those supplied during the Administration period.)

Once the airline is brought out of Administration and is under the ownership of its buyer Bain Capital, all those outstanding credits – which the airline's appointed administrator Deloitte lists as "net $394 million" – will become Future Flight Credits.

Like Travel Credits and Conditional Credits, Future Flight Credits can be used to book travel with Virgin Australia.

Virgin Australia expects that Future Flight Credits will become available for use from September 23 2020, although this date may change depending on the outcome of the Administration process.

A spokesperson for the airline tells Executive Traveller that "further information around their use will be provided to customers following the second creditors’ meeting," scheduled for September 4 2020.

How can you use a Virgin Australia Future Flight Credit?

Future Flight Credits will operate a little differently to Virgin Australia's previous credits.

While they'll still have a cash value, you won't simply be able to use that value towards any booking on any flight, anywhere on the Virgin Australia network.

The airline confirms that "bookings using the Future Flight Credit will be subject to seat availability within the fare class reserved for Future Flight credits on the selected flight."

This means that some flights may not be available for booking using a Future Flight Credit, and that availability may be limited, restricting the number of people who can use a Future Flight Credit on a single flight.

It remains to be seen whether the availability for Future Flight Credit holders will align with a certain class of paid airfare, with Velocity Reward Seat availability, or be controlled in another way. 

Can you book business class using a Virgin Australia Future Flight Credit?

Virgin Australia's new owners are yet to share the full Terms and Conditions relating to Future Flight Credits, including which flights can (and cannot) be booked using a Future Flight Credit.

Recognising that many Future Flight Credit holders will have that credit from a cancelled premium economy or business class booking, Executive Traveller expects that business class bookings would be accepted using those credits, but the airline will share more detail in September.

Which Virgin Australia flights can you book using a Future Flight Credit?

Future Flight Credits will be accepted for bookings on eligible flights operated by Virgin Australia.

Those 'eligible flights' will be determined by the availability of the fare type Virgin Australia uses for Future Flight Credit holders, which, as above, has not yet been confirmed.

At first, Future Flight Credits will be valid only for travel within Australia, reflecting the airline's short-term positioning as a domestic carrier.

They will also be valid for use on "any future services we operate as travel market recovers and restrictions ease," the airline advises, which could include trans-Tasman flights.

Are there any flights you can’t book using a Future Flight Credit?

While Future Flight Credits can be used to book eligible Virgin Australia flights, they can't be used for bookings on Virgin Australia's partner airlines, such as Etihad, Singapore Airlines and Virgin Atlantic.

Even on flights operated by Virgin Australia, some services may have no seats open for booking by Future Flight Credit holders, in which case, the only way to book a ticket would be to spend new money, and save the Future Flight Credit for another time.

It's likely that flights at peak times, such as during school holiday periods and other busy travel dates, may have fewer seats available to Future Flight Credit holders.

Do Virgin Australia Future Flight Credits expire?

Yes, unused Virgin Australia's Future Flight Credits will expire. Once your Future Flight Credit has been issued, you'll have until July 31 2022 to use it up.

Because Virgin Australia accepts bookings up to 11 months in advance, this means all Future Flight Credits can be used for travel up until June 30 2023, provided final bookings are made by July 31 2022.

It's not yet known whether the airline will accept flight changes and cancellations after July 31 2022 for bookings made using Future Flight Credits, but if in doubt, aim to use your credit before then. 

Can you extend the expiry of an unused Future Flight Credit?

All Virgin Australia Future Flight Credits will expire on July 31 2022, and it's not currently possible to extend the expiry date of any unused credits.

However, as above, you can use your credits to travel until mid-2023 by making your final bookings by the end of July 2022: giving you 11 months past the fixed expiry date in which you can fly.

Future Flight Credits for those who booked to Tokyo, Los Angeles

As those holding Future Flight Credits are customers from flights that had previously been cancelled, this will include travellers who'd booked onto Virgin Australia's longer international routes to Tokyo and Los Angeles.

Because international flights are typically more expensive than a quick domestic hop – particularly in premium economy and business class – by nature, the value of those Future Flight Credits may be quite high.

It's not yet known whether holders of Future Flight Credits from these international services will be provided with the option for a refund, or given extra time to spend their credits.

This, of course, would recognise that the service these customers purchased was long-haul international travel – which Virgin Australia has decided not to offer in the short term, even if international travel restrictions ease – as opposed to short-haul travel, on which Future Flight Credits could be used.

Further detail on this is expected in September.

Tips for using Virgin Australia Future Flight Credits

Because capacity controls will be in place for those making bookings using Future Flight Credits, travellers could apply many of the same strategies they'd normally use to make flight bookings using frequent flyer points, which are also subject to capacity controls.

For example, as flights at the most popular times may be in high demand, being flexible with the dates and times you can travel may help you to find an appropriate flight for your journey.

If you're only able to travel during school holiday periods or other busy times of the year, try to book those flights as early as you can.

This could help maximise your chances of not only finding a seat open for booking using a Future Flight Credit, but also giving you a choice between a range of flights, some of which may be more suitable than others.

Can I get a cash refund, instead of a Future Flight Credit?

For the time being, Virgin Australia is not offering cash refunds on flights booked on or before April 20 2020.

Bookings made after that date – during the Voluntary Administration process – aren't subject to the same prohibition, but are subject to the fare rules that were in place at the time of the booking, which generally did not provide the option of obtaining a refund.

As such, customers are unlikely to secure a cash refund on a cancelled flight, so will have been provided with the appropriate type of 'credit' instead.

It's unlikely that Future Flight Credits can be voided and a cash refund issued, but it never hurts to ask: particularly for those with credits stemming from higher-priced trips to the likes of Tokyo, Los Angeles, and other international destinations.

Also read: Bain Capital's $3.5 billion bid for Virgin Australia

Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller, and lives by the motto that a journey of a thousand miles begins not just with a single step, but also a strong latte, a theatre ticket, and later in the day, a good gin and tonic.

31 Mar 2014

Total posts 332

By limiting the use of flight credits, Bain risks losing the good will of those credit holders. Not sure it is a wise decision here.

P1
P1

24 Apr 2017

Total posts 57

I can't see people booking flights who are refused use of their credit, will pay cash for new flights on Virgin....

23 Oct 2014

Total posts 186

No different to offer airlines limiting reward seats on every flight, and there is no advice on the number available, if the 737 has 176 seats would one expect 176 available - no, prob 10-20 would be realistic and prob won’t impact overbooking of credits sitting back and looking at it Network wide. If a credits not available at 9:30am but is at 9am for example ML-SY I have the choice like I do now, use a “reward seat” or pay cash for 9:30am flight for example. That’s my Choice and business is being fair and reasonable,

I’d imagine that’s what credits will be available like into future. They are there, we can use them but it may need a little flexibility just as life was pre COVID. 

I’ll use mine and my velocity points I kept and stuck with VA loyally through administration on the other side to support this re structured airline, one that needs support.

bmc
bmc

Virgin Australia - Velocity Rewards

22 Aug 2013

Total posts 169

I can see the logic in this.  They will have many thousands of people with flight credits out there and as air travel  begins to be slowly used again they don't want their planes full of non-revenue customers

Yes, Bain is stuck between trying to avoid a massive cash drain on Virgin and trying to please and keep so many former Virgin loyalists and passengers who were caught out by cancellations from Covid and then after the airline collapsed. This is probably the best outcome all round. Doesn't mean it's perfect but it's important to be realists. Bain could have gone down the path of saying that you can use your travel credit on any flight as per usual BUT only at 50% of its previous value for example, now THAT would have set everybody whinging. This is really an outcome which although not ideal for passengers holding credit at least lets them use all of that credit.

Joe
Joe

03 May 2013

Total posts 514

Let the games begin..albeit to a negative start. Doesn't bode well.

09 Apr 2020

Total posts 9

Need to get the balance between real new revenue and goodwill as @bmc states, Can't run an airline on goodwill alone and many could have lost all of the money in administration.

Qantas - Qantas Frequent Flyer

09 May 2011

Total posts 345

Booked to Tokyo and as such, absolutely do not want to be forced to use credits to fly domestically when I have no intention to travel domestically. Any update from the ACCC on this?

Virgin Australia - Velocity Rewards

07 Dec 2014

Total posts 164

I asked the ACCC about Virgin generally some weeks ago, in particular why ACCC eventually gave guidance that Qantas had to refund, but didn't do the same for Virgin (despite Virgin's conditions of carriage stating they should be providing refunds if they cancelled/couldn't provide the flight). 

The answer was that they are now in voluntary administration. So essentially we are just unsecured creditors and it seems whatever the administration process outcome is legally applies. By receiving a restricted credit, we are getting less than face-value for our money.

A broader question is whether credit card companies have acted in good faith, rejecting chargebacks when the service was not delivered, and now the replacement is not even a cash-equivalent credit. The mantra of booking with credit cards to protect yourself from insolvency has proven false in this scenario.

28 Aug 2020

Total posts 3

I have put in a dispute with virgin money for a chargeback  , sent in emails from virgin holidays from over 3 months ago ect , they say there won't be a problem with chargeback 

28 Aug 2020

Total posts 3

Btw my tickets were for Singapore Airlines flights 

This is a clear case of where Virgin SHOULD have to offer a refund. It's not as if they can offer a suitable alternative now that they won't be flying top Tokyo or LAX for that matter.

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 171

then forefeit your ticket - when a company goes into admin you aren't entitled to jack. The fact they honouring your credit in full without any real law abiding requirement to do so is a good will gesture - take it or leave it. And seeing as you or anyone else ain't going overseas anytime soon perhaps take a holiday in your state or Australia when time comes and support local travel which will be up and running well before intl market opens. You have to 2022 to think about it.

Qantas - Qantas Frequent Flyer

09 May 2011

Total posts 345

Thanks so much for your incredibly helpful reply Dan22, I really appreciate you taking time out of your day to lecture me on travelling to another state instead of to Tokyo when you have absolutely zero information or context about my reason for travelling to Japan. I purchased the ticket in good faith just prior to Virgin entering administration. The fact that this did not occur as a surprise to them would lead one to believe they should have removed sales for international flying knowing full well it was unlikely to be able to meet their end of the deal. Much like what Qantas has done by removing flights until July next year.

Have an amazing day and I sincerely hope you get out there and explore your country with no doubt unlimited funds like you seem to expect other people to have during and/or after a global pandemic.

All the best

Qantas - Qantas Frequent Flyer

07 Aug 2013

Total posts 171

If it came out harsh this isn't to attack your personal predicatment. But think of it this way - you were always going to spend the money on a trip and were not going to get that money back. You have fortunately received credits to use after a company nearly collapsed - fortunately VA was bought and out of goodwill your existing purchase are honoured with a credit. If VA wasn't bought you would have lost your tickets and not received anything. You can't go to Japan and most likely for a while. So it sucks but yeah atleast you can travel in Aus sometime within next few years with $$$ you would have already spent? 

 

Qantas - Qantas Frequent Flyer

09 May 2011

Total posts 345

You have no information about the reason for my travel to Japan. It wasn’t for a “trip” but thanks for your concern

29 Aug 2020

Total posts 2

Actually if VA wasn't bought out people will be in a better position to get a chargeback because of insolvency. 

13 Apr 2020

Total posts 15

Wrong aklrunway. The decision to remove Japan and LA flights came later from Bain's proposal. And the decision to not go ahead came from border restrictions regardless, as set by the government and travel demand. Be grateful you are getting what you're getting.

27 Aug 2020

Total posts 4

All very well about credits. How about people like us; my wife will be heading for 80yrs. by the time this is over. What little super we have has been flogged. Who knows about our health? Will it be o.k. to go to the U.S. at our age? And we are forced to take a credit? We will see about that!!

27 Aug 2020

Total posts 4

And people wonder why we get cranky and bitter when we get older!

27 Aug 2020

Total posts 1

Thanks Chris, any word on rules around traveller name changes on credits?  

As name changes aren't something we've covered here, that's a question best-directed to Virgin Australia.

09 Aug 2015

Total posts 43

I agree that this is probably the best compromise between VA being on the hook for what must be millions of dollars in travel credits which under a normal credit voucher system be 'free' and cost them a mint, and travellers being able to make use of their credit. I just hope that VA is generous in allocating these special FFC fare types on flights and that they have them in business class not just economy. But they really need to offer a refund if you were booked to Tokyo or LA because there's no way VA will be flying there again any time soon, certainly not in the new few years.

28 Aug 2020

Total posts 1

Bit of a joke. 2 x business class tickets for December to Los Angeles. In excess of $14k. 

At this stage. Money down the drain with no credit card charge back and no refund. 

Ridiculous.

Virgin Australia - Velocity Rewards

30 Oct 2015

Total posts 57

They have lost me as a Platinum member - 2 trips booked with them in business to LAX (July & September), now I'm looking at nothing.

Wouldn't even fly them domestically now - no lounges open, emails being sent saying what you can do if they cancel an upcoming flight..... I'd have better luck picking the lotto numbers than having them fly.

It feels like they have forgotten the number of Velociry members - without them, they are going to struggle. 

13 Apr 2020

Total posts 15

Tracie, Figjam66, please remember the airline went broke and went into administration and has to start again. Credits or refunds haven't been determined yet.

27 Nov 2018

Total posts 3

Sorry if this sounds like a silly question, but do any of these changes impact ‘Travel Bank’ value, containing cash value of flights booked between May-Aug 2020 at fully flexible Freedom fares? Thanks  

Typical of those that don't hold a credit in some cases to say 'pull the ladder up' and bate those of us who do hold international flights. We have moved our travel arrangements twice in good faith and now it looks like no LAX next May as was the last rearranged flight. Arrangements aren't just flights, accommodation and car rental credits have been rearranged and now what? No chance of a flight and little chance of a refund, so we can try and organise through another carrier. Don't go there Mr I'm alright Jack Dan22. Some of our party have saved and planned for this trip over a couple of years and like us, do not hold domestic travel as an option for leisure purposes. If they had ripped up our claims in the first place, then the insurances would have had to pay out, now we are in limbo and as a business platinum FF for the last 9 years, I am not feeling it and instead feel very let down shafted two ways by the whole damn process!

P1
P1

24 Apr 2017

Total posts 57

So, people should have insisted on cash refunds, like were allowed under Australian Consumer law.

The trouble with the law that needs to be fixed ASAP to provide instant refunds with no quibbling. Maybe they should be mandatory, and not optional. Some airlines initially refused cash refunds, and some people are still waiting for them months later, and some were conned into taking (now probably almost worthless) credits.

Virgin Australia - Velocity Rewards

07 Dec 2014

Total posts 164

> So, people should have insisted on cash refunds, like were allowed under Australian Consumer law.

I insisted on cash refunds and never agreed to a travel credit. Virgin refused. My bank rejected the credit card chargeback. The ACCC refused to assist. Its currently with the ACFA in relation to my credit card. What exactly do you propose?

Virgin was trading as insolvent as early as 18 March. They didn't have cash to give, and the systems to protect consumers have failed. 

27 Aug 2020

Total posts 4

Agree with some of the comments. Won't be travelling with them again, unless a refund. We have done our share of domestic travel via caravan, can't afford the price of local accommodation. This was to be the trip of a lifetime, at our advanced age. Hard to believe that there were THAT many internatinal tickets sold. Also having hell's own trouble with Misui Sumitome re travel insurance. AFCA are being flooded with complaints against them. (TickInsurance and Insure and Go).  You have been warned.

Rxm
Rxm

Jetstar Airways - Qantas Frequent Flyer

14 Jan 2017

Total posts 46

First future travel credits next it will be new velocity points. I expect an “enhanced” velocity program in the near future. Glad I redeemed mine before the crashed. 

28 Aug 2020

Total posts 1

We booked a  flight from Auckland to Denpasar return on 28th Feb. Not much chance of being able  to use that. Have to get to Aussie first. How we'd manage to get a flight booked from here might be a challenge. Had insurance, but would t you know it, booked it on 28th after noon,  which happened to be their cut off.

Joe
Joe

03 May 2013

Total posts 514

The Ghosts of Compass........

Thai Airways International - Royal Orchid Plus

15 Jan 2013

Total posts 303

the agency when i booked my sydney flights in conjunction with what was supposed to be my new zealand november cruise has told me to come back soon to work out what to do.whatever the fare difference is i pay up.


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