Virgin Atlantic admits flight refunds may now take 4 months

Virgin Atlantic became the latest airline to come under fire from customers after it admitted they would not receive refunds for coronavirus-related flight cancellations for four months.

The airline, which has grounded most of its fleet and announced 3,000 job losses, had initially tried to persuade customers to accept vouchers for travel at a later date but eventually relented and started approving refunds after a warning from the industry regulator.

Airlines have been battered by the crisis and are burning through cash reserves. They have been accused of holding on to customers' money to stay afloat.

Budget carrier Ryanair has come in for the most severe criticism, refusing to pay any compensation and in some instances telling customers any attempt to claw the money back via a credit card “chargeback” would result in them being blacklisted by the airline.

A Virgin Atlantic refund action group started on social media platform Facebook now had more than 400 members, the Guardian reported, and quoted its founders as saying they had yet to find anyone who had received a voluntary refund from the airline.

Virgin, 51%-owned by Richard Branson' Virgin Group and 49% by Delta Air Lines, said it was paying back about £20m a week in refunds, but declined to say how many customers had been refunded so far and admitted it was now taking up to 120 days to process refunds.

Frustrated passengers related their experiences of the process, citing long delays in communication from the airline then being told refunds would take two months and hearing nothing well beyond that timeframe.

In May the Civil Aviation Authority said it was reviewing the way airlines were treating customers, and warned them that it did not “expect airlines to systematically deny consumers their right to a refund”.

Virgin claimed its customer centre and finance staff were working from home “with limited infrastructure” and had increased the size of the team handling refunds.

“We would like to reassure all customers that if they’ve eligibly requested a refund, it will be repaid in full and we are committed to completing each refund at the earliest opportunity.”

Branson in April offered to remortgage his Caribbean island of Necker to save his airline as the government refused to offer a taxpayer-funded bailout. The billionaire was looking for £500m loan, claiming a cash shortfall.