Virgin Atlantic Flying Club has been offline for over a week with accounts being inaccessible for members when trying to check in online.
At the same time banks have taken a parachute jump and stopped the option of transferring loyalty points to Virgin Atlantic, likely in justified fear of their customers not being able to utilize these points.
Virgin Atlantic -like most airlines- has been battling with liquidity issues and was denied its first loan guarantee application by the UK government (read more here), and was rumoured to run out cash by the end of May (read more here), even planning for possible insolvency.
We now have early June and there hasn’t been any news regarding a Virgin Atlantic insolvency or further loans/bailouts/sales talks.
What is definitely strange is the way how Virgin is handling their customers and especially loyalty members right now.
For over a week Virgin Atlantic Flying Club is displaying the following message when attempting to log in to the the account:
We’re currently experiencing technical issues with some of our systems, and are aware our Flying Club website is currently unavailable. Our teams are working hard to rectify the issue, so we can get the site back up as soon as possible. We apologise to our members for any inconvenience caused.
It doesn’t take a genius to detect the lie in this message. The fact that they shut down access to their loyalty program has nothing to do with “technical problems”.
What’s more likely is that Virgin hasn’t paid their loyalty vendor and as an add-on effect the respective partners of Flying Club that need to be reimbursed for redemptions such as point-out transfers to Hilton Honors.
John was however able to date change and re-issue an already issued ticket last week after the airline (ANA) has a schedule change. Virgin Atlantic processed this change through their whats app chat option without a problem.
It has been eerily quiet about Virgin in the last few weeks which isn’t a good sign, despite Virgins COO giving an interview to Forbes trying to put on a good face on the bad news.
Virgin Atlantic has a strongly devoted following, and many travelers would surely hate to see the airline disappear. Good thing then that Juha Jarvinen, Virgin Atlantic’s Chief Commercial Officer, feels positive about an eventual recovery – even if it takes a few years. Jarvinen has worked in commercial aviation for years. He was previously with SAS and Finnair, and is currently President of the Board of Directors at APEX. He recently shared his thoughts on Virgin’s experience with COVID-19, what the recovery will look like, and some of the key lessons of the crisis.
“The aviation industry had benefited from a positive economic climate for more than 10 years, and risks for a downturn were in the horizon, but nobody of course expected this level of drop in customer demand,” Jarvinen said. “A key learning for the industry is the importance of keeping balance sheets healthy. Cash is king in any difficult period, but especially now.” …
While I usually like Forbes, this is a giant fluff piece with Mr. Jarvinen going on about how Virgin will look like in 2024 without even addressing the issue of how Virgin is planning to survive even 2020.
I don’t doubt for a moment his insight as an industry expert but it’s rather incomprehensible to publish an interview with a top executive of an airline on the brink of collapse without even remotely going into survival plans of his own carrier or do address Virgin customers.
Now the website of Virgin Atlantic alone doesn’t do a lot for members as for many redemptions they have to call in and have an agent assist with using the points. Hold time for Virgin these days is in excess of 1 hour.
Richard Branson has been pretty invisible in recent weeks as far as Virgin Atlantic’s restructuring is concerned after an plea for support from his tax haven residence in the British Virgin Islands was not well received by the public or the government. He has become somewhat of a PR liability as of late.
That didn’t keep Sir Richard from pursuing other projects such as chiming in on the rescue of Virgin Australia, voicing he would support the new owners all the way to an expensive failed rocket launch of Virgin Orbit last week.
UPDATE: We received the following statement from the Virgin Atlantic spokesperson after publishing this piece:
“Because of significant costs to our business caused by unprecedented market conditions which the Covid-19 crisis brought with it, we are exploring all available options to obtain additional external funding. We continue to take decisive action to reduce our costs, preserve cash and protect as many jobs as possible. Constructive discussions with a number of stakeholders are progressing, meanwhile the airline remains in a stable position. Virgin Atlantic is committed to continuing to provide essential connectivity on competitive terms to consumers and businesses in Britain and beyond, once we emerge from the crisis.”
Conclusion
If Virgin is currently unable to offer redemption options to members, be it online / offline of both, then it would be better to come clean about this instead of giving customer the bogus line about “technical difficulties” for over a week. The website worked perfectly fine until Virgin apparently ran out of money (stopped paying their vendors) so that’s hardly a coincidence and definitely nothing technical.
Virgin Atlantic has pushed resumption of flight operations back into August at the earliest in response to the latest announcements about an arrival quarantine in the UK. And so far not a word about new funding which in turn doesn’t bode well for Flying Club members.
