Sigh Of Relief As Virgin Atlantic Brings Frequent Flyer Program Back Online

Virgin Atlantic has been looking for – but hasn’t yet received – a government bailout. They’ve presented themselves as insolvent without one.

To conserve cash there are several airline frequent flyer programs that have suspended redemptions, or partner airline redemptions, that would require them to pay out funds. So when Virgin Atlantic’s frequent flyer program went offline due to technology issues, and some bank card transfer partners suspended points transfers (so the points wouldn’t disappear enroute), that raised alarm bells.

There were certainly many members worried about the future of their Virgin Atlantic miles, and trying to transfer points out to Hilton or to IHG – neither is a good value, Hilton is at least better – and others still trying to make partner award redemptions, though I’ve warned that’s not really a hedge against liquidation, airlines don’t usually pay partners for awards until travel has completed and airlines may not accept tickets issued by airlines that aren’t going to pay them.

Fundamentally I’ve advised that:

  • Bankruptcy doesn’t mean an airline or frequent flyer program goes out of business
  • The concern is liquidation
  • In the event of liquidation even miles in a spun off separate company – while technically ‘safe’ – lose most of their value, because there’s no “saver award” inventory or partner airline inventory to book and get real value from any longer.


Copyright: boarding1now / 123RF Stock Photo

I believe that Virgin Atlantic will survive, that Virgin’s miles will survive, but that its best award values on partner airlines (like premium cabin awards on ANA, Delta, and Air New Zealand) will not last. At least I believe this enough that I haven’t wanted to lose value transferring points out of the program to hotels.

Nonetheless the airline’s paltry explanations of unspecified tech issues have raised a lot of flags for members. So it’s great news that Virgin Atlantic’s frequent flyer program is back online and while as of this writing points transfers from American Express remain ‘temporarily suspended’ it appears that Chase transfers are back. They’re not out of the woods yet of course.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I am glad that you didn’t lose it and accuse Virgin of lying, unlike Sebastian at Loyalty Lobby (based on nothing but opinion, of course)

    Now that you can both earn and burn on KLM / AF, Virgin Flying Club really does start to be an alternative to Pesomiles. I think we’ll see a rationalisation of Lounges, however, and more protectionism of lounges so if you have status with one airline, you won’t be able to use a different airline’s lounges.

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