Virgin Airmiles - What is best to do in present situation?
 

Hi,
With all the speculation around Virgin Atlantic going out of business, I have 180,000 air miles in my account. Do you think it’s wise to book a trip with the air miles now, ie use them with delta or AF/KLM for later on this year so that I can spend them. Before worst case scenario they don’t exist anymore.

That likely will not save your miles. When you use VS points to book on another carrier the underlying ticket is issued by VS and becomes worthless if they go out of business. AF isn't paid by VS until you have flown and if they have ceased to be before you fly well.... Now it is possible that AF/KLM might honor the ticket but I wouldn't bet on it. Also note technically VS Flying Club points are held by a company separate from VS so theoretically it doesn't necessarily go under when VS does but it is likely not funded to survive a VS failure. You can transfer VS miles to certain hotel programs but you take a pretty big hit on value but assuming the transfer occurs and the hotel program is paid before VS goes under (if indeed it does) that would preserve some value.

Yeah I am sitting on nearly 200k miles. Been saving for a family trip.

I hate to say it but I do not see them getting a bailout as they are 49% owned by Delta. UK taxpayers may not see past the perceived notion of "bailing out a foreign company"

That being said I do not see VA folding. Many airlines have gone bankrupt and come out again on the other side.

Unfortunately, our points could be worthless if they go bankrupt.

Unlikely, the last thing you would ever want to do when you buy a company out of bankruptcy is alienate your most loyal customer base.

The UK doesn't have a Chapter 11 bankruptcy process to keep the company alive whilst re-organising its debt. In particular, it's not nearly so straightforward to attract additional financing that would rank senior to existing debt whilst an accounting firm takes over "administration".

Once a UK airline runs out of cash, therefore, it cannot continue to operate. In the absence of somebody coming in to buy the airline, guarantee its debts and provide new funds, it shuts down and is liquidated for spare parts. Due to the coronavirus, there isn't any other airline coming to save VS...

Using up the miles
 

I would like to book an UC tix on Virgin with my miles, looking to rebook for a date I can use. I'm willing to take the chance that VS will disappear but the tix might be exchangeable with AF or KLM or DL. But the $2K surcharge, or whatever it is, on an award tix stopped me cold. When TWA went under, I was sitting on a quarter-million TWA miles. Looked like American was going to buy their assets. So I opened an AA account and just waited ... and I got lucky. The scenario today is much more complicated and scary. I do have faith in Richard, however, and don't think he'll allow the VS employees to be out on the street. We'll see!

I used 200k miles yesterday to book AF and KLM flights for March 2021. Have paid £1000 in taxes for both journeys. Realise the ticketed award flights probably wouldn't be honoured in case of bankruptcy. I'm really hoping VA don't go bankrupt but if it did happen could I get reimbursed for the £1000 taxes through a Section 75 on credit card used to pay taxes?

Look for awards on partner metal and avoid originating in London and you should be able to find redemptions with much more modest surcharges/taxes.

Not familiar with Section 75. However, for US based customers, Chase specifically excludes airline insolvency with its travel insurance, so no luck getting it covered through that method.

I have nearly 180K miles with VS as well. I was debating about booking a flight with Delta for the fall, with the (flawed?) thought that since Delta owns nearly half of VS, they would be more likely to honor the ticket if Virgin Atlantic does fold (versus booking a VS or AF/KL flight). Have not yet, since it is a gamble--not sure if it will be safe to travel then, will the flights still exist, etc.

I hope VS does survive. I have had great experiences flying with them, and feel bad for their employees.

You would certainly be entitled to the £1000 back under S.75.

The section goes further than that though and makes the creditor jointly and severally liable for misrepresentation or breach of contract. You aren't limited to recovery of the amount actually paid.

Bott & Co give a fairly good summary of the position here: https://www.bottonline.co.uk/consume...tion-75-claims

I know there is some debate as to whether one could successfully claim for replacement "partner" flights. Personally, I believe that VS would be in the same position as any other "travel agent" that had gone under and that a claim against the card provider for replacement of the ticket should succeed. I doubt any lender would readily agree to this though - it would probably take a FOS complaint / small claim.

Section 75 is essentially the UK law that deals with CC chargebacks it seems to be a bit more generous than the US equivalent. That said you should be able to do a chargeback if you pay by CC in the US and VS goes under. I'd still minimize the surcharges I was paying (so no VS metal) though.

VS is actually less relevant than you'd think.

Flying Club is not owned by the airline. It is owned 51% by the Virgin Group and the other 49% by Delta. A VS bankruptcy does not automatically drag Flying Club along with it. But naturally Flying Club will run out of money rather fast and airline partners might immediately rip up their partnership agreements.

IMO award tickets on DL are the only thing possibly honoured if VS shuts down.

If you want Delta hopefully the agents can see more than what is on the VS website as based on my analysis today the VS website is showing a tiny fraction of the Delta saver space I see on Delta and Flying Blue at least internationally. This is both of Y and J.

Say what you will about the guy but putting up his island to secure a loan is one way to do it.

Coronavirus: Branson offers Caribbean island to secure Virgin bailout
https://www.bbc.com/news/business-52354865

Alternatively, can you call Delta customer service to book a flight on a Delta stock with the Flying Club points?