Explained: The Qantas lawsuit over not refunding tickets for cancelled flights during the COVID pandemic

The travel and tourism industry was among the first sectors to be hit by the COVID-19 pandemic. Airlines, too, were severely affected. But does this give them an excuse to take advantage of its customers? No, it doesn’t. In a recent move, Qantas Airline Ltd was served with a class-action lawsuit, demanding millions of dollars in refunds and compensation for passengers whose flights were cancelled due to the COVID-19 outbreak, according to Bloomberg. On Monday, Echo Law filed a complaint in Federal Court against Australia’s national airline, alleging that the company misled customers about their refund choices, withheld money, and participated in a “pattern of unconscionable conduct.” Let’s take a closer look. Also read: What is skiplagging, the new air travel hack that airlines hate? The allegations The class action, which is backed by litigation funder CASL, claims that Qantas violated Australia Consumer Law in 2020 by delaying refunds and keeping consumer payments after flights were cancelled. The company alleges Qantas for breaching its own contract with customers by failing to promptly issue cash refunds and with misleading or deceptive conduct in how it informed its customers about their rights for flights that were cancelled due to COVID restrictions in early 2020. Additionally, the class action claims that Qantas violated Australian consumer law by engaging in “a system or pattern of unconscionable conduct” and that it was “unjustly enriched by holding a very significant quantum of customer funds that it ought to have refunded.” While COVID-related cancellations severely disrupted the aviation industry, according to Andrew Paull, partner at the Echo Law, “that is no excuse for Qantas to take advantage of its own customers and effectively treat them as providers of over $1 billion in interest-free loans,” reported The Guardian. “Qantas is currently one of the world’s most profitable airlines and (we will allege) that profit has been built, in part, on funds it unlawfully retained from its customers,” he said, adding, “Qantas held on to its customers’ money and pushed out travel credits with strict conditions, which we allege it was not entitled to do. It now needs to be held accountable and refund that money with interest.” While some of Qantas’ customers experienced financial hardship due to the pandemic, Paull says, the airline “enjoyed the significant financial benefits of holding billions of dollars in customer payments, including interest and reduced borrowing costs.” In addition, Paull criticised the flight credit programme that many customers have utilised, stating that some have been forced to pay the airline “more than their original booking to use their credits on new fares and have been pressured by the airline to do that or lose the value of their flight credits” Any talk from Qantas about now refunding individuals who have not yet used their credits, according to him, is “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,” Paull said. Also read: ‘Ghost flights’: Why is Qatar Airways flying almost-empty planes in Australia? The airline’s response According to The Guardian, Qantas released a statement on Monday, saying “We completely reject these claims." The airline argued it had already processed “well in excess of $1 billion in refunds” from COVID credits, and said, “We’ve been running full-page ads and sending emails to encourage customers who want a refund to contact us directly." “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,” Qantas said. Also read: No Baggage: Why Japan Airlines is encouraging flyers not to carry clothes The travel credits scheme In addition to three extensions of the expiration date for travel credits given in 2020, Qantas started a campaign in July to entice consumers to locate and utilise flight credits from that year. The airline said that it still had over $1 billion in COVID-era credits that had been claimed by Qantas and Jetstar customers, totalling around $400 million. Most travel credits ranged in value from $100 to $500, according to Qantas Chief Customer Officer Markus Svensson, and could be found online. “We’ll keep reaching out directly to customers, particularly ahead of these credits expiring at the end of this year,” he said, according to Dailymail. In addition, the Australian Competition and Consumer Commission is looking into how Qantas handles credits and refunds after giving the airline a warning in 2020 and receiving a complaint from Choice, a consumer advocacy group, in April 2022. With inputs from agencies