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Qantas has settled a class action lawsuit over COVID flight credits for $105 million.
The suit, filed by Echo Law in August 2023, was on behalf of “hundreds of thousands” of Qantas customers on flights scheduled to depart between 1 January 2020 and 1 November 2022, the law firm says. It came after criticism of the Flying Kangaroo’s handling of COVID-era travel bookings.
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“This class action was based on allegations that Qantas customers were contractually entitled to cash refunds when their flights were cancelled due to COVID travel restrictions. Instead of those refunds, Qantas customers were issued with restricted flight credits,” said Andrew Paull, partner at Echo Law.
“This is a very significant financial settlement which will see compensation put into the hands of hundreds of thousands of Qantas customers. We’re very pleased to have been able to achieve this result.
“The settlement sum is in addition to Qantas’ public commitment, given shortly after the class action was commenced in August 2023, to provide refunds to all COVID credit holders.
“Under the settlement, eligible customers will now be able to seek compensation in addition to any existing refund rights.”
In a statement, Qantas said the settlement agreement includes no admission of liability on its part.
“In August 2023, Qantas removed the expiry date on flight credits issued during Covid, meaning customers can request a cash refund indefinitely,” the airline said.
“Qantas has previously made a provision for this matter and an increase reflecting the settlement will be recognised outside of underlying earnings in the second half of FY26.
“The settlement amount will be paid to a Court-approved settlement administrator, with payment currently expected in the first half of FY27.”
Rival Virgin Australia currently holds approximately $93 million in unused flight credits, which are due to expire at the end of June, having been extended four times over the last four years.
“More than 90 per cent of this type of travel credit has now been redeemed by guests,” a Virgin spokesperson told The Australian Financial Review.
“Despite extensive efforts and regular reminders to our customers, the remaining credit balances are seeing almost no usage.”
The Qantas settlement is subject to Federal Court approval.
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