Virgin Australia passengers have won in their battle to have Covid flight credits extended.
The $120 million worth of Covid-related travel credits, which apply to bookings for flights departing before 31 July 2022, were due to expire in December.
Gold Coast man David Nelson told A Current Affair he has just shy of $2000 worth of credit.
“There is no budging on it and everyone like me in this boat is probably getting the same answer – use it or lose it,” Mr Nelson said. “Give it back or extend the credits.”
However, following pressure from the Australian Competition and Consumer Commission (ACCC), Virgin has now extended the expiry date to June 2025.
“Virgin Australia has extended its ‘Covid Credits’ for the third time, giving our customers nearly two more years to use these credits,” a Virgin spokesperson told news.com.au.
“Customers will now be able to use their ‘Covid Credits’ to book and fly by 30 June 2025.
“Covid Credits’ are Standard Credits issued on or before 31 July 2022, for bookings made from 21 April 2020 through 31 July 2022.
“During this period, over $1.2 billion of ‘Covid Credits’ were issued.”
The spokesperson said 90 per cent of those credits have already been used by customers, with approximately $120 million remaining.
News.com.au understands the decision to extend Covid credits was made on Friday last week and at that time the airline started communicating this information directly with customers by email, on its website and through the airline’s trade partners.
While the extension will be automatically applied to all ‘Covid Credits’, the airline advised new expiry date may take up to eight weeks to appear in guests’ Travel Banks.
Those credits can be used to book travel on any Virgin Australia flight, including international codeshare flights with partners such as ANA, Singapore Airlines, United Airlines and Qatar Airways which carry a VA flight number.
There’s no minimum spend, and the credits are not limited to travellers named on the original booking – although there’s no option to have the credits refunded.
Meanwhile, it’s important to note these are different to the Future Flight Credits issued for flights cancelled when the airline was in administration in 2020.
It has an estimated $290 million in unredeemed Future Flight credits, which are still set to expire at the end of this year.
Prior to Virgin agreeing to an extension, an ACCC spokesperson told The Australian the watchdog encourages the airline to extend its expiry dates for all Covid flight credits “to ensure consumers are able to effectively use these credits”.
“This included providing a guidance for the travel industry recommending that businesses should allow consumers a reasonable period in which to use Covid-related credits,” the spokeswoman said.
The ACCC acknowledged that travel credits issued to customers before Virgin Australia entered administration in April 2020 were a special case.
“In such administration processes, the new business is generally able to choose what liabilities of the old business it will or won’t take on,” the spokeswoman said earlier this month.
“As part of the sale to Bain Capital, it agreed to continue to honour existing Virgin credit notes and the administration process included a federal court decision that endorsed the approach taken to Virgin credits that were outstanding at the time of the administration.”
The ACCC accepted these would expire on December 31, if customers were unable to use them, the publication reported.
Qantas also recently succumbed to pressure from the ACCC to do the same thing with its $570 million worth of Covid travel credits.
In late August, former Qantas boss Alan Joyce announced the airline will scrap its December 31 expiry date giving travellers more time to redeem the money on flights or seek a refund.
“Today we’re scrapping the expiry dates on all travel credits that came out of Covid,” Mr Joyce said in a video at the time.
“If you have a Qantas Covid credit, you can request a cash refund at any point in the future.
“And if you have a Jetstar Covid voucher, you can use it for travel indefinitely.”
Mr Joyce said the company had “listened” to furious customers, admitting the credit system “was not as smooth as it should have been”.
Separately, the consumer watchdog also launched Federal Court action against Qantas, alleging the airline advertised tickets for 8000 flights that had already been cancelled.