Virgin Holidays to Speed Refunds for Vacations Hit by Virus

(Bloomberg) -- Virgin Holidays will accelerate refunds to customers who canceled their vacations because of the coronavirus crisis, amid pressure to make the payments from the U.K. government.

The package holiday arm of Virgin Atlantic Airways Ltd. agreed to complete refunds totaling 203 million pounds ($265 million) to 53,000 claimants, the Competition and Markets Authority said Friday. Virgin said it has already processed 98% of the cases and that the rest will be settled by the weekend.

The CMA said in a statement it received hundreds of complaints from people wanting their money back. It plans to continue monitoring the situation and said it will use the courts to enforce the agreement if necessary.

Though travel companies worldwide were forced to freeze operations during Covid-19 lockdowns, Virgin Atlantic found itself in a more perilous situation than most after the U.K. government turned down an application to tap a Bank of England bailout fund. The carrier said it was headed for collapse, before securing a 1.2 billion-pound rescue including a loan from a hedge fund, with the package winning final court approval last month.

“Our focus now is on rebuilding trust with our customers, recognizing that it has regrettably taken much longer than normal to process their refunds,” Virgin said by email, adding that it will revert to a 14-day refund time-frame.

The CMA said Virgin is among more than 100 firms it contacted about slow repayment, with some people saying they’d waited three months for their cash. Airlines argued that they couldn’t cope with the volume of requests, while pressing customers to accept vouchers or rebook for a later date.

“People whose holidays have been canceled due to coronavirus deserve a prompt and full refund,” CMA Chief Executive Officer Andrea Coscelli said. “Should we find that any business is not complying with consumer protection law, we won’t hesitate to take action.”

Virgin Atlantic is separately 95% of the way through its own refunds backlog, according to a spokeswoman.

The carrier is on track to clear the claims by the end of this month, in line with commitments to the U.K. Civil Aviation Authority, she said, and will after that also return to a normal time span for repaying cash.

©2020 Bloomberg L.P.