Virgin Australia customers with around A$90 million in unused flight credits from COVID cancellations between April 2020 and July 2022 have just one week left to spend those credits – or lose the money.
However, following customer complaints, last Friday Virgin made changes to let people to book now and travel later than previously allowed.
If you have some of those unused COVID flight credits, what do those changes mean? And what are your options to try to get a refund?
What are Virgin’s new COVID travel credits rules?
Under the airline’s newly revised policy, customers must still book their flights using the travel credits by next Tuesday, June 30. However, they can now travel until May 27, 2027.
The airline’s February financial update said there were $93 million in unclaimed COVID credits.
Virgin says it has sent multiple reminders to customers with unused travel credits. However, important messages are often lost among promotional emails – or ignored because people think they’re scams.
What Qantas and Jetstar have done
During the pandemic, travellers accepted credits not as a preferred alternative to refunds, but because widespread cancellations left them with limited viable options. For consumers, these credits represent money paid for a service that was never received.
Earlier this year, Qantas agreed to pay $105 million to settle a class action brought against the airline over its COVID credits from 2020 to 2022.
If you still have Qantas COVID credits, you can request a refund of the remaining value anytime.
Qantas subsidiary Jetstar also has no expiry dates on its COVID flight credits.
In contrast, Virgin has set a June 30 deadline to use up the travel credits – and its refund policy, explained below, appears more complicated.
Three possible refund options
Like most airlines, at the height of the pandemic, Virgin pledged to allow affected travellers to change their flight dates or receive travel credits.
This “flexible flying policy” ended on April 30, 2022. But travellers were still offered travel credits for flights booked up until July that year.
Now, with only a week left before the June 30 booking deadline, credit holders might be seeking a refund. But is this even possible?
Here are three options to consider.
Option 1: the airline’s refund policies
Virgin’s flight rules at the time of these COVID bookings stated that refunds were only available if Virgin’s “Fare Rules” permitted.
The Fare Rules and Guest Compensation policy entitle customers to request a refund or travel credit. They do not state the grounds upon which Virgin will actually issue either. So the policy is ambiguous on refund rights.
A travel credit technically represents the total compensation for a cancelled flight. So under contract law, you would not necessarily have the right to a refund.
Virgin stores all travel credits in a “travel bank”. It has discretion on extending their expiry date.
If you still have unused travel credits, Virgin’s revised policy implies that you have a right to seek a refund, but loops you back to the Fare Rules, which again are silent on refund criteria.
In short: it can’t hurt to plead your case with Virgin, but there are no guarantees.
Option 2: check your travel insurance
Some travel insurance policies will cover you for unused airline-issued travel credits. Inclusions sometimes extend to lost prepaid expenses, unused vouchers and non-refundable portions of original fares (subject to limits).
If you had travel insurance, it’s worth checking the terms of the policy with your insurer.
Option 3: Australian Consumer Law
The Australian Consumer Law gives consumers certain rights. These rights override company policies, including on refunds. Services must be:
-
rendered with due care and skill
-
reasonably fit for purpose
-
supplied within a reasonable time.
The courts have previously found these guarantees do apply to air travel.
An airline refusing to issue a refund instead of travel credits due to COVID travel restrictions may risk violating these consumer guarantees.
If the airline cancels a flight and never provides the service, the passenger has not received what they paid for. Offering a time-limited voucher, instead of a refund, may not remedy that problem if it is later unusable, or expires before it can be spent.
In those circumstances, the airline arguably has not properly met its obligation to supply the service.
Where these guarantees are “seriously” breached, the consumer is entitled to apply (under Section 267 of the Australian Consumer Law for compensation equivalent to the airfare initially paid.
This is open to interpretation. For example, cancelling an easily rebookable holiday is less likely to count as a “serious” breach. But a multi-stop trip planned for a special occasion, which can’t easily be rebooked, is more likely to count.
To try this option, submit a claim in writing to Virgin before June 30, citing your consumer law rights.
If the airline does not offer reasonable alternatives, you could then try contacting the consumer watchdog, the Australian Competition and Consumer Commission.
Back when the pandemic prompted mass flight cancellations, the ACCC publicly encouraged airlines to fairly compensate customers.
Clearer consumer protection is needed
There’s a strong case to argue this whole process needs to be simpler for consumers, as it is in Europe.
Responding to a marked increase in complaints about airlines over recent years, the federal government recently allocated $40 million to overhaul airline passenger rights.
But it’s still unclear what practical difference that, and proposed new aviation consumer protection laws, will make for travellers.
Simpler, stronger consumer protections would help avoid confusion for consumers in future.
