Qantas facing class action over ‘hard to use’ travel credits issued during Covid pandemic

The airline is facing a class action in the Federal Court from out of pocket customers over travel credits issued in the place of refunds for Covid-related flight cancellations.

Class action proceedings have been launched against Qantas on behalf of customers left out of pocket when flights were cancelled during the Covid pandemic.

Echo Law has filed the action in the Federal Court, alleging Qantas acted in breach of the law by issuing travel credits with strict conditions in the place of refunds when flights were cancelled.

Solicitor Andrew Paull said they would allege Qantas was “not entitled to hold onto its customers’ money and push out travel credits”.

“As customers sat at home and did it tough through the Covid pandemic, Qantas enjoyed significant financial benefits of holding on to billions of dollars in customer payments including interest and reduced borrowing costs,” said Mr Paull.

“It is unfair and we allege unlawful, that Qantas profited from holding onto its customers money for flights that couldn’t proceed.”

He said Qantas customers had also “often been required to pay the airline more than their original booking to use their credits on new fares”.

“(They) have been pressured by the airline to do that or lose the value of their flight credits,” said Mr Paull.

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.”

Echo Law partner Andrew Paull.

Mr Paull said a recent statement by Qantas saying customers had the “option” of requesting a refund was “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,” he said.

A Qantas spokesman said they “completely rejected the claims” being made by Echo Law, adding the airline had “already processed well in excess of $1bn in refunds from Covid credits”.

“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,” he said.

“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.”

As well as a dedicated call centre concierge, Qantas had initiated a “find my credit” website tool to help customers locate outstanding credits after several years.

Adam Glezer from Consumer Champion said it was not surprising a law firm had taken on the case, adding that it was “about time Qantas was held to account”.

“I receive continual requests from people who have been trying to get their money refunded for a number of years without success,” said Mr Glezer.

“It has left them feeling helpless and extremely frustrated”.

The Australian Competition & Consumer Commission was also investigating the handling of travel credits by Qantas after thousands of complaints.

Many of those related to the fact customers seeking to use travel credits were directed to more expensive flights on the Qantas website, than they were if they were paying cash.

In June, the ACCC indicated the investigation was almost complete.

Echo Law was inviting anyone interested in joining the class action to register at www.echolaw.com.au/qantas.

Founded in 2022 by Mr Paull, a former Slater and Gordon solicitor, Echo Law was described as “a plaintiff law firm, specialising in class actions against established interests”.

Mr Paull said the class action would automatically include all people who had been caught up in the travel credits debacle, and they would seek “appropriate compensation” from Qantas.