Maximise your Avios, air miles and hotel points

Should you be concerned about losing your Avios and Virgin Points to bankruptcy?

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Is there a risk of losing your Avios points and Virgin Flying Club points if the airlines go bankrupt?  And is it even a realistic possibility?

To be honest, this isn’t an article I wanted to write.  However, I am being inundated with emails from readers who are concerned about the value of their points being at risk so it only seems fair to address it.  I hope that my many friends at Avios Group, BA, Virgin Atlantic and Virgin Group Loyalty Company take it in good grace.

I have a lot of skin in this game

Let me put my own cards on the table.  AwardWallet (sign up here, it’s free) shows that I am currently sitting on 6.1 million points across my family members.  Assuming 1p per point of value if spent well, this is £60,000 of value which is potentially at risk.

Avios wing 14

In theory I should be concerned.  However, ‘only’ 2.5 million of these are realistically at risk.  I define ‘at risk’ as meaning they are airline miles.

I don’t see ANY risk to my hotel points since the hotel chains are now all asset-lite businesses which own virtually no hotels and employ comparatively few staff.  IHG, for example, reported a 54% operating profit margin in 2019.

It throws off so much cash that it literally has no idea what to do with it.  Since 2014 IHG has given $3.6 billion back to shareholders ON TOP of their usual dividends.  They are going to have a difficult year, and may need to delay any loan repayments due this year, but it won’t get worse than that.  Occupancy rates in China are already looking strong again after lockdown was ended.

I don’t see any risk to American Express Membership Rewards points either.  Amex isn’t going anywhere in a hurry.

That still means, of course, that I have £25,000 of value ‘at risk’.  Should you – can you? – bail out?

I’m not, for clarity.

Avios wing 12

Should you cash out your Avios balance?

No.

The obvious reason is that IAG is sitting on around €9 billion of liquidity.  If things get so bad that IAG goes bankrupt then we will pretty much be at the end of the world as we know it, living in caves, and your Avios will be the least of your worries.

To be fair, I should highlight the fact that British Airways has recently had its debt downgraded to ‘junk’ status although this report assumes that IAG would let BA, its biggest operation sink in order to save the rest of the group.  In reality, Virgin Atlantic, Norwegian and easyJet will collapse long before British Airways and, by then, the Government would have no choice but to act.

Let’s be more practical for a minute.

I generally value an Avios at 1p and, as my ‘what is an Avios worth?’ article shows, you should actually do a lot better.

If you want to cash out now in panic, however, you obviously won’t be booking BA flights which is where the best value is usually found.

There are other issues too:

you can’t realistically book partner flights.  It is likely that tickets on, say, Qatar Airways would be cancelled if IAG went bankrupt as Qatar Airways would not be paid.

you can’t realistically book hotels using Avios.  As the hotel won’t be paid until after your stay, your room will almost certainly be cancelled if IAG disappears.

the same goes for ‘experiences’ rewards and Avis car hire rewards

Assuming that you don’t book a hotel on Avios for a stay over the next month, the ONLY easy way to cash out Avios TODAY, with 100% certainty of receiving something, is to order a pile of wine via Laithwaites via this page.  The order is executed immediately and you’ll have the champagne, wine or beer within a couple of days.

It’s a terrible deal though, as is redeeming Avios for hotels or car hire.

You are getting around 0.5p per point, compared to 1p+ if you eventually redeem them for flights in premium cabins.  Redeeming in panic and losing AT LEAST half the value of your points is not smart, especially given the low risk of IAG hitting critical trouble.

Should you cash out your Virgin Flying Club points?

My answer is the same for Virgin Flying Club points, with caveats.  Non-flight redemptions generally come out at under 0.5p per point so you’re losing a lot of value.

There are two caveats here though:

the risk of Virgin Atlantic going bust is substantially higher than with IAG.  It is compounded by the fact that Delta, its minority shareholder, is restricted by European rules in what it can do since it is already at its 49% ownership limit.   The sums required are far beyond what Sir Richard Branson could rustle up.  The Government has just rejected Virgin’s first application for a £500 million bailout.

Virgin Flying Club points don’t have real value until you have enough for a long-haul premium flight.  If you have a few hundred thousand Virgin points then, yes, they are probably worth 1p each.  If you have 20,000 Virgin points, they are certainly not worth £200 because there is no way of using them for a premium redemption.

There is another quirk.  Your Flying Club points are not owned by the airline.  They are owned by Virgin Group Loyalty Company, a standalone business which is jointly owned by Virgin Group and Delta Air Lines.

Does this make your points more or less safe?  It depends on how well capitalised Virgin Group Loyalty Company is.  Does it have enough money in the bank so that it could fund a ‘run’ on redemptions?  I am guessing it doesn’t.  My guess is that it was set up with only a modest cash balance on the basis that – month to month – money coming in from selling points to the airline and other partners would match money spent on redemptions.

The easiest options for emptying your account would be:

1:1 into IHG Rewards Club points (minimum 10,000 points) – gets you 0.4p per mile based on my IHG valuation

2:3 into Hilton Honors points (minimum 10,000 points) – gets you 0.5p per mile based on my 0.33p Hilton valuation

£50 Virgin Group voucher for 12,500 miles – gets you 0.4p per point

There are various hotel and partner flight redemptions too, but as with IAG it is likely that your booking would be cancelled if Virgin Atlantic / Virgin Group Loyalty Company went down as there would be no-one to foot the bill afterwards.

If you want to redeem for any of the above, DO NOT CALL due to long queues.  It is easier to use the SMS text message service on 07481 339184.  Note that it will take a couple of days to get a text reply.  The service operates 24 hours and you MUST reply within 60 minutes of being contacted, even if it is 3am.  Failure to reply in 60 minutes means that your case is closed and you need to restart the process.

Conclusion

I’m not bailing out of my points balances.  I don’t see any realistic risk in the case of Avios / IAG.  Even with Virgin Atlantic, I’m not prepared to take a 50%+ discount on what I should get for my points to liquidate them in a fire sale.

Some people have told me that they might switch to a cashback, hotel or Membership Rewards credit card for the next few months.  I can see the emotional reasoning behind that.

Logically, however, it makes no sense.  The new points you earn are no different from the points you already have.  If you’re unwilling to keep accumulating more airline miles then logically you should bail out of your current balances too.  Similarly, if you happy to keep your Avios and Virgin Flying Club points where they are, you should be happy to keep on earning a few more via your cards.

If there is a lesson to learn here, it is one I have been banging on about for years.

Transferable points (ie Amex Membership Rewards, Tesco Clubcard, Heathrow Rewards, HSBC Premier credit card points) are more valuable than non-transferable points (Avios, Virgin points) because you have more options.  1 Amex point is worth MORE than 1 Avios, even though they transfer 1:1, because the Amex points give you a lot more flexibility on top.

PS. If you are not a regular Head for Points visitor, why not sign up for our FREE weekly or daily newsletters? They are full of the latest Avios, airline, hotel and credit card points news and will help you travel better. To join our 65,000 free subscribers, click the button below or visit this page of the site to find out more. Thank you.

How to earn Avios from UK credit cards

How to earn Avios from UK credit cards (April 2025)

As a reminder, there are various ways of earning Avios points from UK credit cards.  Many cards also have generous sign-up bonuses!

In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.

You qualify for the bonus on these cards even if you have a British Airways American Express card:

Barclaycard Avios Plus card

Barclaycard Avios Plus Mastercard

Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review

Barclaycard Avios card

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There are two official British Airways American Express cards with attractive sign-up bonuses:

British Airways American Express Premium Plus

30,000 Avios and the famous annual 2-4-1 voucher Read our full review

British Airways American Express

5,000 Avios for signing up and an Economy 2-4-1 voucher for spending £15,000 Read our full review

You can also get generous sign-up bonuses by applying for American Express cards which earn Membership Rewards points. These points convert at 1:1 into Avios.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on the ‘free for a year’ American Express Preferred Rewards Gold card is increased from 20,000 Membership Rewards points to 30,000 points. Points convert 1:1 into Avios (30,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

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The Platinum Card from American Express

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Run your own business?

We recommend Capital on Tap for limited companies. You earn 1 Avios per £1 which is impressive for a Visa card, and the standard card is FREE. Capital on Tap cards also have no FX fees.

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There is also a British Airways American Express card for small businesses:

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There are also generous bonuses on the two American Express Business cards, with the points converting at 1:1 into Avios. These cards are open to sole traders as well as limited companies.

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Click here to read our detailed summary of all UK credit cards which earn Avios. This includes both personal and small business cards.

Category

British Airways and Avios, Virgin Atlantic and Flying Club

Comments (336)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • Graeme says:
    17 Mar17 March 13:17

    Both Virgin and BA have VERY recently run 50% bonus purchase deals on their miles schemes, just before us dumb public realise the implications of Covid-19 on the industry. Hmmm ………
    I took up Virgin to the max and spent £2250 hard cash. Now, it seems, this is at risk. It seems, miles are not insurance protected, either as converted to a ticket ( correct me if I’m wrong ), or as a balance having had an arguable and quantifiable value. Yet, from our point of view, hey we just shelled out a lot of hard cash, some of us.
    Consensus is Virgin are at much greater risk of bankruptcy than IAG, so here Qs regarding VFC miles ( especially purchases ones )
    Q1 : Might the miles company entertain a refund beyond the normal two weeks cooling off period ( I’m at four now ), given the circumstances ?
    Q2: Since the Virgin miles company is part owned by Delta and Delta will likely survive beyond a Virgin collapse, might Delta honour the miles by moving them into their direct scheme ?

    • Rob says:
      17 Mar17 March 13:39

      I reckon, if you hadn’t booked a redemption, you have Section 75 chargeback rights.

      • Graeme says:
        17 Mar17 March 14:00

        Okay so that’s about half then if successful, right ?
        Or in other words, about the same value as if I just press ahead and jump into Hilton while it lasts.
        Hmmm, what to do ……… risks ……..faith ………. patience ……..

        But what about the likelihood of Delta offering a home ? That would be almost as good as Virgin continuing really.

      • ChrisBCN says:
        17 Mar17 March 17:04

        Interesting. Surely if you bought miles and the miles were delivered into your account, there is no further S75 liability?

        Perhaps a parallel is if you buy some milk on your credit card. Two weeks later the milk has gone off, meaning you can’t use it. I can’t see you winning a S75 claim for that.

        • Lady London says:
          17 Mar17 March 17:12

          That was my thought.

          Let’s face it the miles and points game is a gambling one. Most of the time we come out ahead. But like any investment there are always underlying risks – most can be discounted to zero – plus systemic risks. Systemic risks can also be calculated but timing and if you are caught illiquid has a lot to do with how hard you get hit.

          • Doug M says:
            17 Mar17 March 17:31

            But you come out ahead by taking a beneficial option, using a certain credit card, flying with a particular airline, the things you do to acquire points by switching and selecting things you’d do anyway. The very moment you buy points you’re swapping the stability of savings account for Paddy Power.
            Rob runs endless articles about buying points, the conclusion is always the same. If you need to buy a small amount to top off a redemption fine, but when does he ever endorse large scale speculative purchase. I think there was maybe a case he made for some Melia gifts card on a Black Friday sale, but can’t remember anything else.

        • tony says:
          18 Mar18 March 09:13

          Or is a better parallel buying a gift voucher from a store on a credit card, store goes bankrupt, you make a chargeback via the credit card provider?

          • ChrisBCN says:
            18 Mar18 March 10:57

            That’s a very good point. Have people been successful claiming for that?

    • Doug M says:
      17 Mar17 March 17:25

      Exactly why buying large amounts of points makes no sense. Underlying everything else if that the BoE has been replaced by trust in airline.

  • Aston100 says:
    17 Mar17 March 13:24

    O/T
    After cancelling an Amex PRGC, how long does one need to wait before being eligible to sign up again and qualify for the waiver of the first year fee?
    Thanks.

  • Graeme says:
    17 Mar17 March 13:28

    If I may also go to a third option
    Q3 : How long would the option to convert VFC miles into a hotel scheme like Hilton Honors be available to us ? Might there be a danger in the shutter being drawn on that option at some later point if things look like collapsing at Virgin and also the reward miles company. The Hilton option doesn’t provide as good value as using your miles for actual flights , as explained in the article, but if Virgin/VFC milesis going to disappear then its better than nothing ! I just worry that this option may only be good for so long.
    Thoughts ?

    • Rob says:
      17 Mar17 March 13:37

      You are correct. This is now a self fulfilling prophecy, because if 500 people converted 20 million points today into Hilton after reading the article then it is more likely that the option will disappear very soon.

    • Lady London says:
      17 Mar17 March 17:22

      @Graeme based in what Rob is saying you can price the cost of certainty if that is the most important to you. You can lose about half but get certainty… or as much certainty as being in the IHG or Hilton schemes will give you. If you’re not going to spend and consume immediately in those schemes for hotel rooms you will also have to monitor for risk there.

      I understand your feelings about having made a large recent buy-in for cash however presumably you intended to consume your Virgin miles soon otherwise the advice would have been not to swop cash for illiquid airline miles.

      If you still want to consume in Virgin then your consumption is surely now delayed and same risk using those miles for kl or af flights as vs. delta flights if purchased now possibly, just possibly less risk.

      So given you want certainty @Graeme if you are able to consume hotel rooms now and if you think your risk of getting nothing spending your vs miles as Vs miles is > 50% then go for hotel conversion but only provided you will spend and consume pretty much immediately.

  • Richard M says:
    17 Mar17 March 14:21

    What about the option of booking a flight through Virgin Miles as far as possible into next year on Air France/KLM.

    What are the protections and might the future refund/rebooking options be depending on the status of the outbreak in say Jan 2021?

    I say this on the basis that Air France/KLM are a global player and strategic companies that the French/Dutch governments are unlikely to allow to fail, unlike Virgin which is a small niche airline running mostly duplicate routes.

    • memesweeper says:
      17 Mar17 March 14:22

      Air France/KLM are unlikely to honour your miles booking if Virgin goes bust.

      • Graeme says:
        17 Mar17 March 14:37

        But maybe Delta ?? They co-own the reward company. Might Delta honour your miles ?

        • Rob says:
          17 Mar17 March 14:37

          This is more likely, I agree. However, in normal times standard priced Delta reward availability – as opposed to premium priced reward seats – is virtually impossible to find.

    • Rob says:
      17 Mar17 March 14:32

      History shows that other airlines failed to honour redemption tickets issued by other airlines which went bust.

      • Charlieface says:
        17 Mar17 March 14:37

        I would thhink that S75 would cover you in that instance as it insures you against the immediate retailer, in this case Virgin, for not fulfilling their contract: paying AFKL for the flight

        • Lady London says:
          17 Mar17 March 17:30

          +1. On that basis and taking all the above into account then if @Graeme can find a Delta flight available he wants to book then he has a concrete liability to cover under s.75 by paying with credit card. Liability would be for delivery of the flights booked though not cash ewuivalent.

          Also note that usually the selling airline for the first flight on your ticket is where your recourse would be (successful or unsuccessful) if there was a failure.

  • Ant says:
    17 Mar17 March 15:10

    OT: anyone has a direct number to Amex travel? There is no number on the invoices or on their website

    • Stu N says:
      17 Mar17 March 21:09

      0800 032 7233 – it’s on the website but quite well hidden. Opening hours are 0900-1700.

      I called a couple of mins after 0900 this morning, selected call back and they rang me back just after 1000. Have your card and (ideally) booking refs to hand to make it as easy as possible for them. Mine was straightforward hotel cancelations so sorted easily enough.

  • Graeme says:
    17 Mar17 March 15:21

    Not a Q but a statement here. Political yes but also practical for us facing the sharp end of losses.
    Trump and Boris to seek damages from China if it can be shown that the variant was lab created, they lacked responsibility, they lied and withheld data making our experience worse than it need have been. Any one of those things. Options to seize Chinese assets or take as debt relief. This has cost our economies dearly and there must be an accounting to deter future misadventure / lack of responsibility. US and UK governments should step in now to maintain continuity of disrupted industries. Get the money back later, from them. Perfectly serious in my suggestion.

    • PerkyPat says:
      17 Mar17 March 16:12

      Followed by Iraq seeking damages from US/UK for 1million plus dead etc, etc.

    • marcw says:
      17 Mar17 March 16:34

      Total complete BS.

      • Graeme says:
        17 Mar17 March 16:41

        US and UK have power to do it.

        The likes of Iraq don’t.

        If we have the will to do this we can. Pay for some of the support hat must come to keep continuity plus make consequences for the CPC in their failure/stupidy/malice.

      • Lady London says:
        17 Mar17 March 17:05

        With respect, +1.

        • Novice says:
          17 Mar17 March 19:14

          Rob deleted my comment but left the G mans.

          Ah well it must be to do with who he’s mates with.

          I’m not bothered. But what I said wasn’t wrong I was just calling out the guy for his offensive comments on a travel site.

      • Lady London says:
        17 Mar17 March 17:34

        jingoistic sabre-rattling.
        recent protectionist moves by some countries will have the effect of reducing the benefits of world trade to everyone and indirectly reducing safety for everyone too.

    • ChrisBCN says:
      17 Mar17 March 22:31

      What on earth have you been reading/watching?

  • rams1981 says:
    17 Mar17 March 15:23

    OT I have also been hit with a Monese account closure. Just an email saying because we could’t gather enough information your account will be closed.

    Good whilst it lasted.

    • Lady London says:
      17 Mar17 March 17:08

      Really?
      do you think they have grounds for this?

      Or, IYV are they giving a lame excuse when the truth is that they are unhappy with your transaction pattern?

      • rams1981 says:
        17 Mar17 March 17:50

        They have clearly followed no protocols but I’ve used it purely for credit card top ups and bank transfers out (as well as a few standing orders) so can have few complaints.

        • Axel says:
          17 Mar17 March 19:53

          Would concur. I got kicked out of the monese party last week.

          My card got rejected in coop just before blocking app. so with some hfp luck transferred out all funds except £115.

          Not sure if Monese will willingly return funds from closed account or put up a fight. What is readers experience of this?

          • Shoestring says:
            17 Mar17 March 20:02

            they won’t put up any kind of fight – your main problem is contacting them to say you want to close the a/c and get money transferred out

          • rams1981 says:
            18 Mar18 March 10:44

            they proactively contacted me to transfer the funds back.

  • Graeme says:
    17 Mar17 March 15:24

    Its disgusting to think that a great airline like Virgin could go bankrupt because of the misadventure of the CPC

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