Qantas has been hit with a class-action lawsuit over COVID-19 flight credits, with the airline accused of “misleading or deceptive conduct” for not refunding cancelled flights.
Echo Law, supported by litigation funder CASL, has lodged proceedings in the Federal Court against the Flying Kangaroo on behalf of what it says are “hundreds of thousands” of Qantas passengers.
Qantas, which has previously strongly denied allegations of price gouging on COVID-19 credit rebookings, has been contacted for comment.
The suit claims that Qantas engaged in “unlawful actions” including failing to refund the customers in line with its own conditions of carriage. Andrew Paull, Partner at Echo Law, said the carrier is now one of the most profitable airlines in the world, and that this profit “has been built, in part, on funds it unlawfully retained from its customers”.
“While COVID posed major disruption to air travel and resulted in cancellations that no airline wished to make, that is no excuse for Qantas to take advantage of its own customers and effectively treat them as providers of over $1 billion in interest-free loans,” he said.
“We allege Qantas breached the law by failing to be transparent and immediately issue refunds to customers when flights were cancelled. Instead, Qantas held onto its customers’ money and pushed out travel credits with strict conditions, which we allege it was not entitled to do. It now needs to be held accountable and refund that money with interest.”
The national carrier has faced huge criticism over the last few years for its handling of COVID-19 credits during and after the pandemic.
Last year, for example, consumer advocacy organisation Choice even filed a formal complaint with the ACCC after consumer surveys highlighted the “many obstacles” faced by customers seeking to cash in their credits.
Choice said one survey showed nearly a third of people trying to use flight credits to purchase new flights were forced to pay more than the cost of the original flight.
Qantas denied the accusation and indicated fare discrepancies were due to rules that restricted flight credit holders to only purchase tickets of the same fare class or higher.
The airline last extended its credit expiry deadline in March after pressure from Choice, with credits now available for use until the end of 2023 for flights departing before 31 December 2024.
Additionally, Qantas’s “Find My Credit” tool, launched in June, can track bookings up to three years old that may have changed several times due to the pandemic, and last month it rolled out an ad campaign reminding customers to use their credits.
Echo Law has alleged it was unlawful for Qantas to hold customers’ money for flights that could not proceed, and that those looking to use their flight credits have been pressured to pay more than their original fares to use the credits on new bookings or lose them.
“In addition, there are many customers who for various reasons will not use their flight credits before they expire at the conclusion of calendar 2023, at which point the credits will ‘expire’ and their value will reduce to $0,” said Paull.
“While Qantas has talked in recent weeks of giving customers the ‘option’ of requesting a refund, this is both too little and too late. That money ought to have been automatically returned to customers, in most cases more than three years ago, and we are seeking both refunds of all remaining credits as well as compensation for the time customers have been out of pocket.”