Virgin Australia flight credits: Some passengers face restrictions on spending credits

Virgin Australia customers holding COVID-19-related cancellation credits beware: you're not all created equal.

Virgin Australia has created two kinds of flight credits for passengers who experienced cancellations due to COVID-19, and those that received a "Future Flight Credit" before the airline's financial collapse last year may find they're not able to use the credit on their chosen flight.

Adrian Wallis and his wife had a return flight from Christchurch, New Zealand cancelled in March last year as Australia was preparing to go into lockdown.

"I was able to obtain a booking from Christchurch to Melbourne on Qantas, on March 24, before travel across the Tasman ceased," Mr Wallis said. "I applied for a credit with Virgin Australia, which was granted."

One year on, Mr Wallis' attempt to use his flight credit for his preferred flight was rejected, because all seats available for "Future Flight Credits" had already been allocated.

Virgin Australia has put quotas in place restricting the number of Future Flight Credit fares per flight. Those holding "Standard Credits", issued after the airline's purchase by Bain Capital, are not subject to the same quota.

Mr Wallis, of Malvern in Melbourne, said: "Naive me, I just thought if I had a credit, that could surely have been used on any class of ticket, at any time. It was just my money.

"Instead, I was informed that I could not use this credit on a preferred flight from Melbourne to Darwin, because 'all the credit bookings on that particular flight had been secured'. This, in spite of there being seats available.

"What an extraordinary policy promulgated by the airline."


The inequity is specific to Virgin Australia (Qantas does not have any tiers for its cancellation credits) because it went into administration on April 21, 2020. Customers with cancelled flights purchased before that date fell into the basket of creditors owed money by the previous owners.

Those with flights purchased after that date that were subsequently cancelled with credits applied were seen as the new regime's full responsibility and were subject to the airline's "Travel Bank" arrangements.

Wallis is disappointed he was never informed of the difference. "I received no information on the classification of the credits," he said.

According to Virgin Australia, credit holders such as Mr Wallis would have lost their money if the pure principles of insolvency were applied. Instead, as "an act of goodwill", Virgin's new administration decided to honour the credits, but with seat quota limitations.

The Future Flight Credits do have superior longevity, valid for booking until July 31, 2022 and travel until June 30, 2023. Virgin Australia's customers with Standard Credits must use them within 12 months from the date of issue.

The spokesperson said more than 400,000 customers had booked flights with Future Flight Credits since they were issued.

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