Qantas agrees $105m payout over COVID-19 flight credits
Qantas has agreed to a multimillion-dollar settlement to end a class-action lawsuit over contentious COVID-19 flight credits.
The lawsuit accused the airline of violating its contractual refund obligations to customers whose flights were canceled between the beginning of 2020 and Nov. 1, 2022.
The $105 million deal Qantas announced on Friday is subject to approval by the Federal Court of Australia.
Under its terms the airline assumes no liability.
The airline stated that it had already made a provision for the lawsuit and that the increased amount would be recognized outside core earnings in the second half of the financial year.
Qantas shareholders appeared unimpressed with the announcement; Its shares fell partially when the Australian Securities Exchange opened on Friday.
Echo Law filed a class-action lawsuit against Australia’s national carrier in 2023, alleging the airline misled customers about refund options, withheld funds and engaged in a “pattern of unlawful conduct.”
The firm alleged that Qantas breached Australian consumer law by not providing immediate refunds and withholding customers’ funds when flights were canceled in 2020.
The airline denied the allegations at the time and announced that it had refunded more than $1 billion to customers affected by flight disruptions in 2020.
Qantas has launched a campaign to encourage customers to use their remaining flight credits after Australia’s consumer watchdog said its investigation into the matter was almost complete.
In August 2023, Qantas removed the expiration date on flight credits issued during the pandemic; This meant customers could request cash refunds indefinitely.
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