Charges refunded for failed flights

Virgin’s administrator has agreed to refund taxes and charges paid for rewards tickets and flights that never took to the skies.

Virgin’s frequent flyer scheme, known as Velocity, temporarily paused some refunds after the airline fell into voluntary administration.

Virgin’s administrator has agreed to refund taxes and charges paid for rewards tickets and flights that never took to the skies after striking a deal with Bain Capital to recapitalise and acquire the airline.

Virgin’s frequent flyer scheme, known as Velocity, temporarily paused some refunds after the airline fell into voluntary administration on April 21 with debts of about $7bn, drawing the ire of some of the airline’s top frequent flyers.

But, as flagged by The Australian this month, Velocity has begun refunding taxes paid on cancelled flights.

“If you booked on or before April 21, 2020, for travel before September 30, 2020, we’ll waive any applicable change or cancellation fees,” Velocity said on its website.

“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.”

For passengers who booked on or before April 21 but were scheduled to travel after September 30, Virgin’s standard terms and conditions regarding changes would apply, the company added.

“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.”

Travel Bank was the platform that held Virgin Australia travel credits.

The airline’s administrator, Deloitte’s Vaughan Strawbridge, last month temporarily paused issuing new travel credits and refunds on paid fares — including of taxes — after the airline went into administration.

Instead, Mr Strawbridge secured an order from the Federal Court allowing Deloitte to issue conditional credits to passengers who had their flights cancelled. The credits include the value of the fare and the taxes paid for a ticket.

But Virgin told its frequent flyers last month that those who had their frequent flyer tickets cancelled were entitled to receive a full refund of the Velocity Points used towards the affected flight, without being charged a cancellation fee.

A Deloitte spokesman said earlier this month: “All efforts are being made to process qualifying refunds and applicable taxes as quickly as possible.”

Virgin has received about 340,000 requests for refunds after cancelling 65,000 flights between March 1 and April 30 due to the coronavirus pandemic.

Travel refunds have been a thorny issue during the COVID-19 pandemic.

From March 13, Flight Centre charged customers $300 who wanted a refund on international flights and $50 on domestic flights that were cancelled before the company bowed to public pressure and scrapped the charges early last month.