Virgin Miles if they go Bust !

[Mickie]

Nothing like miles are absolutely safe or guaranteed, it’s one of the reasons I opted for the fee free card even though for us the £160 fee on the plus card would make sense.

That being said as mentioned the reward scheme isn’t part of VA itself so wouldn’t automatically be wound up. Neither is Virgin Money the credit card company. It’s likely they would try to find other ways of redeeming the points if they can, such as already exist with partner airlines. But as I said nothing is guaranteed

[dippy lippy]

There was a really good article on this a few weeks ago on the head for points site - (which offers great advice/info) .

I'm also in same boat with nearly 800k miles in bank - and still spending on Virgin reward + CC wondering if I would be better putting all my spending on Tesco CC.

[dippy lippy]

This is the article (copied / pasted) from Head for points

Should you be concerned about losing your Avios and Virgin Flying Club miles to bankruptcy?
Is there a risk of losing your Avios points and Virgin Flying Club miles 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, Virign 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.
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.
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.)

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.
The only risk as I see it is that, if it came to the crunch, the UK Government may not want to support a Spanish business. The Spanish Government – not exactly flush with cash – may insist any IAG bailout is ringfenced for Iberia.
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 miles?
My answer is the same for Virgin Flying Club miles, with caveats. Non-flight redemptions generally come out at under 0.5p per mile 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.
Virgin Flying Club miles don’t have real value until you have enough for a long-haul premium flight. If you have a few hundred thousand Virgin miles then, yes, they are probably worth 1p each. If you have 20,000 Virgin miles, 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 miles are not owned by the airline. They are owned by Virgin Group Loyalty Company, a standalone business which is jointly owned by Virgin Atlantic and Delta Air Lines.
Does this make your miles 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 miles to the airline and other partners would match money spent on redemptions.
There’s another factor. You can only redeem Virgin Flying Club miles for non-flight rewards by calling up. It can’t be done online. You are looking at spending a couple of hours on hold, given the queue times at the moment, just to end up using your miles for a sub-optimal redemption. It’s not a great use of your time.
The easiest options for emptying your account would be:
1:1 into IHG Rewards Club points (minimum 10,000 miles) – gets you 0.4p per mile based on my IHG valuation
2:3 into Hilton Honors points (minimum 10,000 miles) – 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 mile
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.
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 miles 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 Flying Club miles) 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.
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[eaglesrest]

The only bit I don't agree with on the above, is the advice to keep using Virgin credit cards to collect miles. Even if you decide to keep the miles in VA Flying Club, it doesn't make sense to continue to add to your risk.

I think it makes more sense to get/use an amex gold card (where possible) and keep the points in the member rewards account.

If VA start flying and stabilise then transfer to FC. If not then 1) you definitely still have the points and can be used for multiple AMEX options, and 2) they can be used in a more point efficient manner than if they had been 'rinsed' via FC and then ultimately transferred to a hotel loyalty scheme

[dippy lippy]

Certainly makes you think if you should switch your spending to another user - but which one?

[cartwheel]

I currently have 270K Virgin Flying Club miles as my 1st class flights to Las Vegas were cancelled just before the lockdown. The miles were refunded pretty much immediately, however still waiting for the tax element (approx £1300) to be refunded. They initially said 14 days now I think we are at 100 days. My honest opinion is I think they may well go bust as there doesn't seem to be any appetite for a bailout, so will look at transferring the points out and hope that I might get my money back at some point - which I consider doubtful tbh. I used to have a virgin credit card but changed to an Amex gold a year or so ago and have 60K points so far with lots of options, well worth considering..

[munmun]

I would certainly stop using my Virgin Atlantic Mastercard if I could find a Hotel point MC to change to would love a Hitlon CC. I have an Avios AE for the major part of my spend.

I am not a great Virgin user, I used to use them to travel to the Caribbean but after an awful flight where I made a major complaint about the behaviour of some crew who were alternately dismissed (it was serious) I have stopped flying with them. I do not like the way they have treated friends and family in the Covid situation so have transfered my points to Hilton where i am more likely to use them.

Now i need to keep searching for a MC i want.

[dippy lippy]

Have very little knowledge re earning / spending Avios - but the AMEX gold is looking favourable at the moment.
I have around £70 sitting on a nectar card which I think can get me Avios so I guess that would be a start!
Well - lets hope our virgin airmiles still have some value in the future!

[AntonyJ]

Folks with good number of miles, are you aware of this redemption on ANA to Tokyo?

We used this just a year ago to get First and Business return seats for the two of us (I sat in business, "slumming it" lol) and went to the amazing Tokyo Disney and then Tokyo itself.

It cost me something like 210,000 air miles plus 740 quid in taxes and fees.

The orig story has been updated in the link below to perhaps get an open jaw ticket, but not done that myself yet.

headforpoints/2019/0...ng-club-miles/

godsavethepoints/ana...omplete-guide/

Of course they need not to go bust, and to get the 2 tickets we used took a bit of effort and a few nervous days, but the experience was worth it, and the cost about the same as buying 2 economy tickets on other airlines.

Hope they survive, I want to do the same trip May next year

[eaglesrest]

Originally Posted by munmun

I would certainly stop using my Virgin Atlantic Mastercard if I could find a Hotel point MC to change to would love a Hitlon CC. I have an Avios AE for the major part of my spend.

I am not a great Virgin user, I used to use them to travel to the Caribbean but after an awful flight where I made a major complaint about the behaviour of some crew who were alternately dismissed (it was serious) I have stopped flying with them. I do not like the way they have treated friends and family in the Covid situation so have transfered my points to Hilton where i am more likely to use them.

Now i need to keep searching for a MC i want.

See more...

If you would use the IHG brands then they have MC cards which offer good signup bonus and member priv level boost.

If the VA CC become obsolete, I might just stick with my MBNA horizon at places where AMEX not accepted. It has 0.5% cashback, which isn't great, but better than nothing.