Qantas flight credits confusion as CEO accused of rewriting history

Confusion continues to reign over Qantas flight credits as the clock ticks down to the expiry of about $370m in fares held by the airline.

Qantas Group CEO Alan Joyce delivers the airline’s full year results, a record underlying profit of $2.47bn. Picture: NCA NewsWire/Christian Gilles

Qantas boss Alan Joyce has been accused of trying to “rewrite history” with his claim all customers were informed of their right to a refund, when flights were cancelled during Covid.

Speaking at the airline’s full year results last week, Mr Joyce was asked about the outstanding travel credits held by customers worth about $370m and due to expire at year’s end.

Mr Joyce said when Covid happened “we had to cancel every flight because we couldn’t operate and we had to put people into credit”.

“In every email we sent our customers we said there was an option when we cancel a flight for you to get a refund,” he said.

“We had for a couple of months the call centres were inundated with calls but we fixed that within a few months, we doubled the size of the call centres.”

The comments came as preparations continued for a class-action lawsuit against Qantas over refunds allegedly withheld from customers following flight cancellations.

Echo Law partner Andrew Paull filed the case in the Federal Court last week, accusing Qantas of misleading or deceptive conduct, and unconscionable conduct in contravention of Australian Consumer Law.

He said Qantas could not rewrite history after issuing millions of dollars worth of travel credits.

“There is a wealth of written evidence showing that Qantas misled its customers by failing to clearly acknowledge their entitlement to a refund,” said Mr Paull.

“It’s disappointing that even now the airline is refusing to properly recognise how it treated its own customers.”

A media statement issued by Qantas as borders closed in response to the Covid pandemic, said “all bookings on cancelled flights were being converted to travel credits which can be used anywhere on our network”.

An email sent by Qantas to customers informing them of their flight cancellation, and access to a travel credit. Picture: Supplied.

Further emails sent by Qantas and media statements referred to flights cancelled by customers (in response to the Covid pandemic) being eligible for a travel credit.

A travel voucher for a cancelled flight issued in March 2020, suggested a refund was only available if the original booking fare permitted one.

Qantas also provided an email sent in June 2020, which did include an option of a refund, although the customer was informed their payment had already been converted to a travel credit.

Qantas has provided this email to show it did offer refunds to some customers after cancelling their flight during the Covid pandemic.

In March this year, Qantas chief customer officer Markus Svensson said that customers whose flights were cancelled by Qantas and received a travel credit could get a refund.

The rules were not so clear for those who cancelled their own flights due to Covid disruption.

People with Qantas or Jetstar travel credits had until December 31, 2023 to make a flight booking using those credits or face losing them altogether.

In recent months Qantas stepped up efforts to make it easier to book a flight using the credits adding dedicated agents to its call centres and launching a “find my credits” website tool.

An industry insider suggested the whole credits debacle had helped Qantas deliver a record $2.47bn underlying profit for the year to June 30.

The source said Qantas had “effectively charged customers twice” for their flight, by taking their money and then issuing a credit which was in many cases only able to be used towards a much more expensive fare.

Chief financial officer Vanessa Hudson said the money held by Qantas had played no part in the airline’s profit for the 2023 financial year.

Qantas acknowledged last week fares remained above pre-Covid levels, adding that “after inflation was taken into account, domestic fares were 4 per cent higher, and international fares up 10 per cent on 2019 levels”.

In a fiery hearing before a Senate Committee inquiry into cost-of-living, Jetstar CEO Steph Tully revealed the value of travel credits unused by their customers was not included in the Qantas figure.

She said the amount varied from day to day but it was about $100m, and about 50 per cent of that figure was made up of travel credits for flights costing less than $100.

The amount of travel credits still outstanding from Qantas customers overseas was also excluded from the $370m.

It was unclear how much those credits were valued at, but it was suggested the figure was “under $100m”.

The Australian Competition and Consumer Commission was continuing to investigate Qantas’ handling of flight credits after thousands of complaints.