The future of Virgin Australia seems secure, at least for now, after Bain Capital agreed a deal to buy the airline from the administrators.
The deal will still require creditor approval but this is likely to be a formality, despite the fact that debts worth a reported A$6.8 billion will be wiped out.
Bain Capital was one of two shortlisted investors. The other party, Cyrus Capital – which was part of the investment group behind the failed reboot of Flybe – withdrew, leaving Bain as the winner. Bain Capital is the biggest shareholder in the fledgling Virgin Voyages cruise ship business and the deal presumably has the blessing of Virgin Group, although this is not discussed in the public statements.
The Queensland state Government will also be an investor, with a reported 5% stake, after agreeing to proved A$200m in cash and benefits. This followed an attempt by the New South Wales Government to encourage the airline to move to Sydney.
Bain Capital has reportedly injected A$125m immediately to keep the airline flying until August. This will keep it in the air until the formal meeting of creditors can rubber-stamp the deal.
It is not clear what plans Bain has for the airline. It is believed that it is not willing to take on Qantas too aggressively, and will focus on being a smaller scale carrier covering domestic and New Zealand routes. The plan does not seem to include resuming long haul to routes to cities such as Hong Kong.
It will, however, remain a full service airline and will not attempt to copy the low cost carrier model. It appears that Bain wish to reposition the brand as a mid-market carrier, retaining some of the lounges but focussing lesson corporate and more on the value-driven market, not unlike JetBlue in the US.
The good news on the loyalty front is that all Velocity frequent flyer bookings will be honoured, and the scheme will continue. Velocity is currently run as a separate business but it appears than Bain wants to integrate it back into the main airline. The company has also committed to keep existing employee packages intact for those who remain with the business.
If you want to find out more, there is a detailed ABC article on its website here.
How to earn Virgin Points from UK credit cards (October 2021)
As a reminder, there are various ways of earning Virgin Points from UK credit cards. Many cards also have generous sign-up bonuses.
You can choose from two official Virgin Atlantic credit cards (apply here, one has a bonus of 15,000 points):
You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.
American Express Preferred Rewards Gold is FREE for a year and comes with 30,000 Membership Rewards points, which convert into 30,000 Virgin Points:
Until 2nd November 2021, there is a special offer on The Platinum Card from American Express.
You will receive a sign-up bonus of 60,000 Amex points which converts into 60,000 Virgin Points.
(Want to earn more Virgin Points? Click here to see our recent articles on Virgin Atlantic and Flying Club and click here for our home page with the latest news on earning and spending other airline and hotel points.)