Qantas Reaches $105 Million Settlement in Covid-19 Flight Credit Class Action
Qantas Airways has agreed to a substantial multi-million dollar settlement to terminate a class action lawsuit concerning its controversial Covid-19 flight credits. The legal action, which accused the airline of failing to meet contracted refund obligations for customers with flights cancelled between early 2020 and November 1, 2022, has been resolved with a $105 million agreement. This settlement, announced by Qantas on Friday, is pending approval by the Federal Court of Australia.
No Admission of Liability in Settlement Terms
Under the terms of the settlement, Qantas makes no admission of liability regarding the allegations. The airline has noted that it had previously set aside provisions for this lawsuit, and the increased settlement amount will be recorded outside of its underlying earnings in the second half of the financial year. Shareholders showed little reaction to the news, with Qantas shares experiencing only a fractional decline when the Australian Securities Exchange opened on Friday.
Allegations of Breach and Unconscionable Conduct
The class action was filed in 2023 by Echo Law against Australia's national carrier, alleging that Qantas misled customers about their refund options, withheld funds, and engaged in a pattern of unconscionable conduct. Specifically, the firm claimed that Qantas breached Australian consumer law by not immediately issuing refunds and by retaining customers' funds when flights were cancelled in 2020.
At the time, Qantas rejected these claims, stating it had refunded over $1 billion to customers affected by flight disruptions in 2020. In response to mounting pressure, the airline launched a campaign to encourage customers to use their remaining flight credits after Australia's consumer watchdog indicated that an investigation into the issue was nearing completion.
Policy Changes and Ongoing Implications
In a significant policy shift in August 2023, Qantas removed the expiry date on flight credits issued during the pandemic, allowing customers to request cash refunds indefinitely. This move came as part of broader efforts to address customer concerns and regulatory scrutiny. The settlement marks a pivotal moment in resolving the long-standing dispute over flight credits, which has been a contentious issue for travellers and the airline industry alike during the Covid-19 era.
The outcome highlights the ongoing challenges faced by airlines in managing refund policies amid unprecedented global disruptions, while also underscoring the importance of consumer protection laws in ensuring fair treatment for passengers.
