Qantas faces class action over handling of Covid travel credits

Qantas is facing a class action over its handling of Covid travel credits. It is accused of using customers as providers of “$1 billion in interest-free loans”.

Qantas is facing a class action over its handling of Covid refunds and travel credits.

Echo Law announced on Monday it has lodged proceedings against Qantas in the federal court on behalf of “hundreds of thousands” of Qantas customers whose flights were cancelled during the Covid pandemic due to travel restrictions.

Echo Law partner Andrew Paull accused the airline of treating its customers “as providers of over $1 billion in interest-free loans”.

“We allege Qantas breached the law by failing to be transparent and immediately issue refunds to customers when flights were cancelled,” he said.

“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.”

Echo Law further alleges the airline was “misleading” to customers about their rights on flights cancelled due to Covid and the company was “unjustly enriched” by holding customer funds for years that should have been refunded.

Qantas said “we completely reject these claims” in a statement on Monday.

Echo Law says its class action is on behalf of “hundreds of thousands” of Qantas customers. Picture: NCA NewsWire / Jeremy Piper

“We have already processed well in excess of $1 billion in refunds from Covid credits for customers who were impacted by lockdowns and border closures,” the Qantas statement said.

“The majority of customers with Covid credits can get a refund and we’ve been running full page ads and sending emails to encourage customers who want a refund to contact us directly.

“Qantas has one of the most flexible Covid credit policies of any airline, including among our global peers, and we’ve extended the expiry dates three times.

“We’ve made a number of improvements to our systems along the way, including simplifying the process for a refund and making the credits easier to use, and that’s clear from the amount of credit that has already been claimed.”

As of June, there was about $400 million worth of Covid credits remaining for Qantas customers in Australia and the majority were credits ranging from $100 to $500.

That month, Qantas launched a “Find my credit” tool on its website for customers to search for Covid credits using their original booking reference that is up to three years old.

At the time of announcing the new tool, Qantas said about 80 per cent of customers who had Covid credits had the option of a refund if they preferred.

Customers who booked through travel agents were instructed to contact the agent directly to arrange a refund.

There were about $400 million worth of Covid Qantas credits remaining in June. Picture: NCA NewsWire/Tertius Pickard

The Covid travel credits expire on December 31, 2023 and can be used to book trips until December 2024.

Mr Paull claimed the communication about the option to get a refund was “too little 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,” he said.

In response to this claim, Qantas said it had “always been very clear to customers” that they were entitled to a refund if Qantas cancelled their flight, and invited customers with remaining Covid credit to contact them.

As for the claim they benefited financially, the airline said: “Qantas lost more than $25 billion in revenue and posted statutory losses of $7 billion during the pandemic.”

The legal action is being funded by Australian litigation funder CASL.

Echo Law encouraged Qantas customers to register their interest in the class action on its website. It states if the class action is unsuccessful, group members will not pay any cost.