Virgin reveals mountain of unused travel credits in wake of Qantas revelations

The airline, led by Jayne Hrdlicka, has revealed the size of its own mountain of unused flight credits due to expire at year’s end.

Virgin Australia boss Jayne Hrdlicka has revealed the airline is sitting on its own mountain of unused travel credits, accrued in the course of the pandemic and the company’s administration.

Speaking on the ABC on Tuesday, Ms Hrdlicka was asked about travel credits, following on from revelations Qantas held more than $500m from customers unable to take flights during the pandemic.

Ms Hrdlicka said there were three types of travel credits held by Virgin Australia, including for flights booked before Covid that didn’t take place.

“Those credits are credits that were incurred prior to the company going into administration, and there were about $700m of those credits pre-Covid,” said Ms Hrdlicka.

“They’re down to about $300m and those credits expire at the end of this calendar year, and we’re doing everything we can to get those down.”

Ms Hrdlicka said due to the terms of Virgin’s administration, the credits were “unable to be refunded”.

“Then there were $1.2bn (in credits) that occurred during Covid, when borders would reopen and close again, resulting in flight cancellations,” she said.

“Those credits are down to roughly 11 per cent, so roughly $100m of those credits remain, and we’re confident they’ll get worked out through the end of this year.”

The third bucket of credits were “standard credits that come and go during the course of the year and have natural expiries on them”, Ms Hrdlicka added.

Virgin Australia CEO Jayne Hrdlicka has revealed the airline is holding more than $400m in travel credits accrued during Covid-19, due to expire at year’s end. Picture: Brendon Thorne/Bloomberg

The total of more than $400m was not far off Qantas and Jetstar’s own amount, which had come down from $2bn earlier on in the pandemic.

Despite pressure for the airlines to extend the expiry date of the travel credits beyond December 31, 2023, on Monday Jetstar CEO Steph Tully said there was a need to “draw a line in the sand”.

“Qantas and Jetstar have both extended (the deadline) three times already,” she said.

Ms Tully said it wasn’t a simple matter of just refunding the fares because of the complexities involved in running an airline.

“When Covid occurred back in March 2020, there were half taken trips where the actual amount of refund wasn’t clear,” she said.

“There’ve been codeshare tickets, interline tickets and over time credit card details have changed.”

The Senate Committee inquiry into cost of living heard Qantas was repeatedly emailing customers with outstanding travel credits, and would soon start sending text messages as well.

“Our intention is that there will be zero credits remaining (by December 31),” said Ms Tully.

The Australian Competition & Consumer Commission began examining Qantas’s handling of travel credits in April last year, after thousands of complaints.

Many of those complaints centred on concerns customers were being directed to higher airfares if they tried to use travel credits than if they were paying cash.

In June, ACCC commissioner Gina Cass-Gottlieb indicated the investigation was almost finalised, but the watchdog was still yet to release a report.

Originally published as Virgin reveals mountain of unused travel credits in wake of Qantas revelations