Virgin Australia administrators move to re-offer credits for cancelled flights

The administrators of the stricken airline Virgin Australia have asked a court to approve a scheme to once again start offering flight credits, which they put on ice after taking control of the company a fortnight ago. But the proposal stops short of paying the approximately 340,000 requests for a refund received since the administrators, partners at the big accounting firm Deloitte, took office. The flight credit plan is one of a series of requests the administrators have made of the federal court in an attempt to avoid or reduce personal liability for debts Virgin Australia continues to run up as most of its 140 planes sit idle on the tarmac. In an affidavit filed with the court, the lead administrator, Vaughan Strawbridge, also said 19 interested parties were poring over Virgin’s financial data, and asked for extra time to hold a second meeting of creditors so that they can be presented with a concrete offer to buy the airline. Preliminary bids are due on Friday, and binding offers by 12 June. None have yet been received, Strawbridge said. Strawbridge said Virgin Australia had cancelled 6,400 flights as a result of the coronavirus pandemic and the “inability of the Virgin companies to pay refunds or offer credits at present puts them at a competitive disadvantage”. “In this regard, I note that the inability of the administrators to pay refunds to customers who booked their tickets before the Virgin companies entered into administration has been the subject of recent media coverage,” he said. He said offering flight credits was also “necessary to preserve as much goodwill associated with the Virgin brand and business as possible for a buyer”. The proposal would allow customers to book new flights but would not allow them to get cash refunds.<br/>