Jetstar target of new class action over unused Covid travel credits

Jetstar passengers are going to court to try to recover money paid for flights cancelled during the pandemic, in a new class action brought by Echo Law.

The law firm pursuing Qantas over its handling of Covid-19 travel credits has now launched a class action against Jetstar for similar behaviour.

Echo Law partner Andrew Paull said after filing the Qantas lawsuit last year, the firm had been contacted by scores of Jetstar customers frustrated with the way flight travel credits were handled.

He said the claim had been served on Jetstar on Wednesday with proceedings lodged in the Federal Court.

“The legal underpinning of the Jetstar matter is slightly different to the Qantas case but at its heart it’s still a case about Jetstar not having the legal right to simply issue credits when it cancelled all of its flights at the beginning of Covid,” Mr Paull said.

“We say that legally it was obliged at that point to return people’s money to them. It didn’t do so, so there’s now two remedies we’re seeking.”

They included firstly, the return of monies paid by customers to Jetstar for flights that did not happen, and secondly interest or some other compensation for being left out of pocket.

“If someone held your money for four years and you finally had to sue them to get it back, you wouldn’t be happy if they simply said ‘well fine have it back’, you’d want something further,” said Mr Paull.

Andrew Paull of Echo Law.

The class action was being brought on an “open basis” which meant that everyone who was affected was automatically included unless they took steps to opt out.

Mr Paull said people did not need to “fill out forms” but those interested in following the litigation could register their details with Echo Law and they would send out updates and other information about the case.

At a Senate hearing last year, Jetstar CEO Steph Tully revealed the airline was holding about $100m in unused travel credits from customers whose flights were cancelled during Covid-19.

Ms Tully said about 50 per cent of that sum was made up of fares of less than $100 each.

“So you can imagine the context of contacting those customers to use that amount,” Ms Tully told the hearing.

Jetstar CEO Steph Tully during a senate hearing into the cost of living. Picture NCA NewsWire/Aaron Francis

Mr Paull said it was unacceptable Jetstar enjoyed “significant financial benefits” by holding onto customers’ payments while they sat at home unable to fly, and Echo Law alleged such behaviour was unfair and unlawful.

A Jetstar spokeswoman said they were reviewing the claims made in the class action, and pointed out the airline had removed expiry dates for Covid vouchers so they could be used indefinitely.

“These vouchers are also multi use, meaning they can be used across multiple bookings and for multiple people,” she said.

The law under which the class action was being brought included contract law and other types of legislation, because no specific law existed in Australia to deal with the particular circumstances of the matter, Mr Paull said.

“It’s not as clear as it is in other jurisdictions such as Europe and the US where it’s much clearer that people are entitled to get their money back if the flight is cancelled and doesn’t go ahead,” said Mr Paull.

Echo Law had also been contacted by customers of Virgin Australia left out of pocket in similar circumstances, but due to the airline’s administration in 2020 it was a “special case”, Mr Paull said.

“The courts approved a special treatment of the debts owed to people including to customers by Virgin Australia, to avoid the company going bankrupt,” he said.

The class action against Qantas was set to go to mediation to try to reach a satisfactory outcome between now and the end of the year.

In the event agreement could not be reached, Mr Paull said they were prepared to have the Federal Court decide the case.