Qantas sued: Airline hit by class action lawsuit for holding ‘over $1billion’ in credits from cancelled flights during Covid pandemic

Qantas has been hit by a class action lawsuit seeking millions of dollars in refunds and compensation for customers whose flights have been canceled following the Covid outbreak.

Echo Law filed suit against Australia’s flag carrier in Federal Court on Monday alleging the airline misled customers about their refund options, withheld money and engaged in a “pattern of unconscionable conduct”.

The move comes a month after Qantas launched a campaign to encourage customers to use the airline’s remaining $400 million in flight credits, and after the Australian consumer watchdog said its investigation into the matter was nearing completion.

Backed by litigation funder CASL, the lawsuit alleges that Qantas breached Australian consumer law by not immediately issuing refunds when flights were canceled in 2020 and by withholding customers’ money.

Echo Law partner Andrew Paull said Qantas initially only allowed customers access to use “travel credits with strict conditions” rather than return their payments.

“We claim that Qantas violated the law by not being transparent and refunding customers immediately if flights were cancelled,” he said.

While Covid caused major disruption to air traffic and resulted in cancellations that no airline wanted to make, that doesn’t excuse Qantas from taking advantage of its own customers and effectively treating them as providers of more than $1 billion in interest-free loans. .’

Mr Paull said some Qantas customers have been forced to spend more money with the airline to use up their original flight credit, while others may not be able to use the credit before it expires on December 31, 2023.

“While Qantas has spoken in recent weeks about giving customers the option to request a refund, this is both too little and too late,” he said.

“That money should have been automatically returned to customers, in most cases more than three years ago, and we are demanding both a refund of any remaining credits and compensation for any time customers have had no money.”

Qantas has extended the expiration date of travel credits issued in 2020 three times and launched a campaign in July to encourage customers to search for and use flight credits from 2020 onwards.

The airline said it had about $400 million in Covid-era credits and more than $1 billion had been claimed by Qantas and Jetstar customers.

Markus Svensson, Qantas’ chief customer officer, said many travel credits were between $100 and $500 and could be found using an online tool.

The Australian Competition and Consumer Commission is also looking into Qantas’ handling of credits and refunds following a warning to the airline in 2020 and receiving a complaint from consumer group Choice in April 2022 (pictured, Qantas CEO Alan Joyce)

“We will continue to engage with customers directly, especially before these credits expire at the end of this year,” he said.

The Australian Competition and Consumer Commission is also looking into Qantas’ handling of credits and refunds following a warning to the airline in 2020 and receiving a complaint from consumer group Choice in April 2022.

The airline has been contacted for comment.