Virgin Australia unlocks refunds on frequent flyer bookings

With its future seemingly assured following a multi-billion dollar sale to US-based Bain Capital, Virgin Australia is now refunding Velocity Frequent Flyers for taxes and charges paid against points-based bookings on flights that were subsequently cancelled.

Virgin put the brakes on Velocity refunds after the airline collapsed on April 21, struggling against a future which saw little flying yet weighed down by almost $7bn in debt.

Airline-appointed administrator Deloitte has now moved to have Velocity pay back those taxes and surcharges, which for some travellers have amounted to thousands of dollars in forward bookings.

Velocity members are now being contacted by email and advised that payments will be made within 21 days, although Executive Traveller understands that this period could stretch into months due to limited staffing and the backlog of refunds being processed.

Deloitte says the airline has received 340,000 requests for refunds, and that "all efforts are being made to process qualifying refunds and applicable taxes as quickly as possible."

Bain's recovery plan for Virgin Australia includes an estimated $1.65bn injection, of which some $600m is set aside to cover existing travel credits for cancelled flights.

Virgin Australia's Velocity website now advises frequent flyers holding points-based redemption bookings that "if you booked on or before April 21, 2020, for travel before September 30, 2020, we’ll waive any applicable change or cancellation fees."

“If you or Virgin Australia cancel your flight before September 30, 2020, we’ll refund your points or cash in full to the original form of payment.”

Redemption bookings made on or before April 21 for travel after September 30 will still be subject to the airline's standard terms and conditions regarding changes.

“However, members who would typically receive a refund to Travel Bank will now receive a refund to original form of payment until Travel Bank, or a suitable alternative, is available," the airline says.

Bain Capital has said that it will retain the Velocity Frequent Flyer scheme – along with all the points currently held by members and the "pricing architecture" of redemptions – while working to "bring the Velocity and Virgin brands closer together."

That's expected to include integrating them into the same website and smartphone app, while investing in data analytics to learn more about members and their behaviour.

Read more: Here is what Bain Capital's Virgin Australia 2.0 will look like

David Flynn

David Flynn is the Editor-in-Chief of Executive Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.