Virgin Australia ‘in administration’
Links on Head for Points may pay us an affiliate commission. A list of partners is here.
In what would be the biggest coronavirus-related airline failure so far, reports from Sydney say that Virgin Australia has been placed into administration with an announcement due on Tuesday morning.
The airline had been in bail-out talks with both regional and federal Government, with reports that the federal request was for A$1.4 billion (£700 million).
This is NOT necessarily the end of the line.
Virgin Australia had exceptionally high debt of A$4.8 billion (£2.4 billion). The airline is very well regarded in Australia and, freed of its debt burden, should have a future.
There is substantial concern in Australia over what would happen to domestic air fares if Qantas had a virtual monopoly. The Guardian reports that the head of the Australian Competition and Consumer Commission, Rod Sims, has insisted that Australia needs two airlines, and has launched an investigation into attacks on Virgin Australia by Qantas.
The key issue now is whether the Government or a private investor chooses to buy the airline out of administration, or whether the lenders agree to a ‘debt for equity’ swap which would give them the keys.
It isn’t clear what would happen to people waiting for refunds on cancelled tickets, but I would suspect that a credit card chargeback will be required. I would also suspect that future bookings will not be honoured.
None of these routes would mean that the ‘Virgin’ branding would necessarily disappear. The administration process should allow the existing contract to be voided but it presumably adds value to the business. Virgin Group only held a 10% stake in the airline and there is no requirement for Virgin-branded businesses to include Virgin Group as a shareholder.
Deloitte is believed to be lined up to act as adminstrator, with the Virgin Australia CEO Paul Scurrah remaining in place.
How to earn Virgin Points from UK credit cards (December 2021)
As a reminder, there are various ways of earning Virgin Points from UK credit cards. Many cards also have generous sign-up bonuses.
You can choose from two official Virgin Atlantic credit cards (apply here, one has a bonus of 15,000 points):
Virgin Atlantic Reward Mastercard
The UK’s most generous free Visa or Mastercard at 0.75 points / £1 Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending Read our full review
You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.
American Express Preferred Rewards Gold is FREE for a year and comes with 20,000 Membership Rewards points, which convert into 20,000 Virgin Points:
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express comes with 30,000 Membership Rewards points, which convert into 30,000 Virgin Points:
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Click here to read our detailed summary of all UK credit cards which earn Virgin Points.
(Want to earn more Virgin Points? Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)
Ken 
J 
marcw 
J 
AJA 
Anna 
Callum 
Charlieface 
Harry T 
Nick 
Rob 
Sam 
Christian 
Barbara Wakely 
No lockdown for moi 
SamG
Geoff 1977
blenz101
Comments (50)