This article was last updated on April 26
I fly a lot for work and have frequent flyer miles with several airlines around the world. I know the airline industry is being devastated now with all the coronavirus induced travel bans. But I was surprised when I got the following note from Virgin Airlines –
You may be aware that some of the Virgin Australia Group companies have entered Voluntary Administration. Deloitte has been appointed as the administrators, meaning they have assumed responsibility for the business and operations of those companies in administration.
We’ve made the difficult decision to pause all redemptions for an initial period of four weeks, effective immediately. This means you won’t be able to redeem your Points [miles] for rewards during the pause.
While I only have a handful of points in the Virgin Velocity program following some interstate travel during a business trip to Australia, I have hundreds of thousands of frequent flyer miles (or points) across United, Delta and American thanks to 20 years of flying and credit card programs! So this really got me worried.
When I researched this topic online it was not clear cut what the US airlines can do when it comes to canceling their frequent flyer programs but it appears almost certain that airlines can pause redemption or significantly devalue points pretty much at will. While the US has more protections for fliers, globally there is not much recourse if they go into administration or bankruptcy!
What are your thoughts on this? Should I cash in my 600,000+ miles/points? Many airlines frequent flyer programs allow miles to be redeemed for products or gift cards, which I am stating to seriously consider at this point.