In a huge blow for Australia's aviation industry, Virgin Australia has been placed into the hands of administrators.
The Virgin Australia board met last night, with accounting firm Deloitte appointed administrator.
The development comes after the Federal Government has repeatedly refused Virgin Australia's requests for a $1.4 billion emergency loan package. Separate crisis talks with several state governments have failed to come up with a solution to bail out the grounded airline.
The collapse of Virgin Australia is expected to leave up to 16,000 jobs and a range of creditors in limbo – including banks, retail and institutional investors.
How will this development impact those holding Velocity Frequent Flyer Points?
The collapse of Virgin Australia will understandably leave Velocity Frequent Flyer members nervous about the fate of their hard-earned points.
However, it's important to note that Velocity has been a highly profitable arm of the company, and it won't necessarily disappear if the airline goes bust. The future of the Velocity program remains to be seen, and we'll be reporting any updates as they come to hand.
While many Velocity members have recently taken steps to transfer and redeem points, Virgin Australia has in recent days taken a number of steps to prevent a ‘run' on points. These actions have included removing the ability to transfer to Singapore Airlines, and limiting gift card purchases.
If you've not yet taken steps to redeem your points, be aware that Velocity has suspended points redemptions for four weeks – so you'll need to sit back and wait as the situation evolves.
More to come.
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