Whilst I'm definitely not an expert on company insolvency, once an administrator is appointed all debts are put on hold and a creditors committee is formed. Those who are owed money get to decide if the company is wound up or if they will accept settlement of their accounts at X cents on the dollar and the business continues, usually in a restructured form. If the financial difficulties were the result of a one off event and the company is otherwise viable this might be acceptable to all concerned especially if future business would be important eg Boeing, whilst not in administration have their suppliers working with them as they simply can't afford an important customer to go broke. If there is little chance of the business returning to profitability then it gets wound up and creditors are paid out usually at a loss, from the proceeds of asset sales and anything in the bank.
Virgin have stopped the transfer of Velocity frequent flyer points to Singapore Airlines Kris miles and limited their use for purchase of gift cards to one per day. Those with longer memories might recall that Ansett Golden Wing members lost points worth around $700 million when the airline collapsed. It's similar to the foreign exchange market when traders get out of what they perceive as risky currencies and go for safe havens. Kris miles give access to the entire Star Alliance network and SIA are in receipt of a government bail out.
https://www.executivetraveller.com/n...ines-suspended
Virgin Australia has slammed on the brakes for Velocity Frequent Flyer members trying to
transfer their points into the KrisFlyer scheme of partner Singapore Airlines.
Until earlier today, the partnership between Virgin and the Singaporean flag-carrier allowed the frequent flyer points of one airline to be converted into those of another, under an innovative arrangement launched in 2014.
However, the Points Transfer page on the Velocity website now carries a notice at "Velocity Frequent Flyer and Singapore KrisFlyer are temporarily suspending conversion of Points and Miles between the two programs. We're looking forward to providing you with this program feature once flight schedules return to normal."
The transfer facility opened the door for Virgin customers to obtain points-based award bookings and flight upgrades not only with Singapore Airlines but right across the Star Alliance with premium partners such as ANA, Lufthansa, Swiss and Thai Airways.
However, recent speculation on the fate of Virgin should the coronavirus crisis extend beyond six months may have sparked a rush to convert the airline's Velocity points to the perceived safer haven of Singapore Airlines.
Gift card transfers also limited
Less than 24 hours ago, Virgin
clamped down on using Velocity points to purchase a gift card valid at major retail outlets, imposing a limit of one gift card per day.
The gift cards sell for between 3,000 and 35,000 Velocity points, with a redemption value of between $10 and $200 across some two dozen partners including Apple, David Jones, Dymocks, Endota Spa, JB Hi-Fi, The Iconic, Rebel Sports, Ticketmaster and Westfield shopping centres.
While gift cards don't represent the best value for Velocity points, they retain their value for upwards of a year and can be used to purchase goods on sale, which can increase the effective overall value of the Velocity points used to buy the card.
A six-month deadline?
Earlier this week, Virgin Australia confirmed it has approached the Federal Government for a $1.4 billion bailout in order to survive a prolonged coronavirus grounding.
The airline is said to have sufficient cash at hand to weather up to six months in the current COVID-19 lockdown scenario, which has gutted the travel market, with Virgin Australia CEO Paul Scurrah saying the airline was asking for "temporary support, not a handout."
"We want to work with government on how best to design this but it will be a repayable loan," he told ABC Radio. It's reported that if the airline was unable to repay the loan in full within two to three years, the government would take an equity stake in the company.
However, Deputy Prime Minister and Transport Minister Michael McCormack maintains Virgin Australia will not receive any special treatment.
"Whatever we do for Virgin we are going to have to do for other companies as well. We can’t just pick and select individuals and winners out of this," McCormack said, adding that Virgin should consider raising capital from its existing shareholders, which includes Singapore Airlines and Etihad Airways.