Virgin administrator Deloitte will guarantee passenger tickets

Anyone booking tickets with Virgin will get a refund if their flights don’t go ahead, the airline’s administrator says.

Virgin Australia’s administrators say customers buying tickets for flights will not be left out of pocket. Picture: AAP

Anyone booking tickets with Virgin Airlines since it went into administration on April 21, will get a refund if their flights do not go ahead, Virgin Airlines administrator, Deloitte’s Vaughan Strawbridge has told The Australian.

In an interview on Monday, Mr Strawbridge, said customers who had booked flights with Virgin before it went into administration would be given a credit which could be used to book flights once travel resumed.

He said this would apply during the period of the administration and, hopefully, under the airline’s new owner which is expected to be named by the end of June.

But any money paid for Virgin tickets while it was under administration, from April 21, would go into a fund managed by the administrators with purchasers being guaranteed they will get a refund if the flight does not go ahead.

“People will get their flight, but if they don’t they will get a refund,” he said.

“That goes without question.

“We will always make sure we can refund it,” he said.

Mr Strawbridge said it was the responsibility of the administrators to make sure the money from any future booking was protected.

“It is the responsibility of the administrators to make sure that for any new bookings we receive we either provide the flight or a refund.”

Deloitte confirmed last week that the administrators had $100 million in cash which they believes was sufficient to run the airline until was is sold by the end of June.

Mr Strawbridge confirmed that the bidding process had come down to a short list on Monday, with all members of the short-listed group having signed a confidentiality agreement not to discuss their bids with other members of the short list.

While Deloitte was not naming the shortlisted bidders, they are believed to be BGH Capital/Australian Super, Bain Capital, New York based hedge fund manager Cyrus Capital Partners and US aviation firm Indigo Partners.

Canadian infrastructure investors Brookfield has dropped out of the race, while India- based InterGlobe appears to have been blocked by its refusal to put a price on the airline, a decision made as it believes it has not been given sufficient information.

Mr Strawbridge’s comments about guaranteeing Virgin tickets came as several Virgin bidders were believed to be pushing for the federal government to provide a guarantee for ticket sales to ensure that travellers could make bookings with confidence, with safeguards in place in the event that the airline went into receivership.

Such a government guarantee was secured during the administration of Ansett in October 2001, and it allowed the carrier to resume limited services between major cities.

The guarantee was provided to Ansett to help attract a buyer for the business and generate revenue, but the business was eventually put into administration after a bid by Melbourne billionaires, Lindsay Fox and Solomon Lew to buy the airline failed.

The Australian understands Virgin discussed the issue of a ticket guarantee with the federal government last month as a means of keeping the airline alive before it was placed into administration.

But the request was rebuffed by Transport Minister Michael McCormack.

Mr Strawbridge confirmed that the administrators have asked the federal government for several undertakings but he would not say what they were.

“We have a whole host of asks with the federal government but I can’t go into the specifics,” he said.

But he said the administrators were liable to ensure that any money paid forward for tickets was refundable if the flights did not go ahead.