Lift off for $105m Qantas COVID-19 flight credits compo

Australia's national carrier was accused of breaching contracted refund obligations to customers who had flights binned by travel restrictions between the start of 2020 and November 1, 2022.

Ticket holders were issued flight credits instead of cash refunds, sparking a class action representing hundreds of thousands of flyers.

A $105 million settlement to the lawsuit, revealed by Qantas on Friday, is subject to approval by the Federal Court of Australia.

Under its terms, the airline makes no admission of liability.

Echo Law filed the class action against Qantas in 2023, alleging it misled customers about their refund options, withheld funds and engaged in a "pattern of unconscionable conduct".

The firm accused Qantas of breaching Australian consumer law by failing to immediately issue refunds and retaining customers' funds when flights were cancelled in 2020.

Eligible customers would be able to seek compensation on top of any existing refund rights, Echo Law partner Andrew Paull said.

"This is a very significant financial settlement which will see compensation put into the hands of hundreds of thousands of Qantas customers," he said in a statement.

"We're very pleased to have been able to achieve this result."

Court orders will be sought to directly notify affected group members, including details on how they can claim a share of the settlement if approved.

The airline initially rejected the class action's claims, declaring it refunded more than $1 billion to customers impacted by flight disruptions in 2020.

Qantas launched a campaign to encourage customers to use remaining flight credits before removing the expiry date in August 2023 so customers could indefinitely request a cash refund.

The carrier noted it had previously provisioned for the lawsuit and payment was expected in the first half of next financial year.

Qantas shareholders appeared unfazed by the announcement, with shares only fractionally down after the Australian Securities Exchange opened on Friday.

Qantas reached a separate agreement with the consumer watchdog in 2024 to pay $100 million in penalties for misleading consumers by offering and selling tickets for flights it had already decided to cancel.

It committed to a $20 million remediation program, with compensation payments ranging from $225 for domestic passengers to $450 for international flyers.

Australian Associated Press