Qantas Faces Class Action Lawsuit Over Pandemic Travel Credits
Qantas faces class action lawsuit over pandemic travel credits treated as $1bn in interest-free loans. Lawyers are arguing that the airline's usage of travel credits allowed them to treat its customers' money as more than "$1 billion in interest-free loans."
Jane RestureAug 22, 202372 Shares17929 Views
Qantas faces class action lawsuitover pandemic travelcredits treated as $1bn in interest-free loans. Lawyers are arguing that the airline's usage of travel credits allowed them to treat its customers' money as more than "$1 billion in interest-free loans."
This allegation is being made in a class action lawsuit that is being brought against Qantas for its refund policy for flights that were cancelled due to the pandemic. On Monday, the class action firm Echo Law made the announcement that it had filed proceedings against Qantas in the federal court "on behalf of hundreds of thousands" of pandemic-affected travelers.
The firm's goal is to compel Qantas to issue refunds for all remaining flight credits and compensation for lost interest on money held by Qantas for its customers.
The company claims that Qantas engaged in behavior that was either misleading or deceptive in the way that it communicated with its customers in the beginning of 2020 about their rights for flights that could not proceed due to Covid restrictions.
Additionally, the company claims that Qantas breached its own contract with customers by failing to provide cash refunds in a timely manner.
Thousands Of Aussies Take Qantas To Court Over Pandemic Credits Scheme
The class action further claims that Qantas was "unjustly enriched by holding a very significant quantum of customer funds that it ought to have refunded" and that Qantas participated in "a system or pattern of unconscionable conduct" in violation of Australian consumer law.
Qantas has been accused of deceptive behavior in promoting a flight that its own sales employees could not find. While the aviation industry was severely disrupted by Covid-caused cancellations, 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, said Andrew Paull, partner at the recently launched Echo Law.
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. 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.- Andrew Paull
While some of its customers suffered financially as a result of the epidemic, Qantas reaped significant financial benefits from holding billions of dollars in customer payments, including interest and reduced borrowing costs, according to Paull.
Paull also criticized the flight credit scheme that many customers used as a result, claiming that some were required 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 so or lose the value of their flight credits. Any discussion from Qantas about refunding people who have yet to utilize their credits is both too little and too late, Paull stated.
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.- Andrew Paull
CASL, a class action funder, is supporting the class action, and the company has invited impacted customers – including those who have already utilized Qantas ticket credits – to register to join the litigation.
Qantas released a statement on Monday, saying:
We completely reject these claims.- Qantas
The airline said it has already processed "well in excess of $1bn in refunds" from Covid credits, adding that they'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
In June, Qantas stated that around $400 million in Covid credits remained unutilized, and that 80% of these customers had the option of receiving a refund if they so desired.
Covid credits will expire on December 31st and must be booked for journeys used until December 2024. Throughout the epidemic, almost $2 billion in Covid credits were distributed across the Qantas group, which includes discount carrier Jetstar.
Qantas disputed on Monday that it had engaged in deceptive behavior in a separate issue involving offering a special return fare to London on its website that was barely accessible and which its own sales people were unable to book for consumers. In 2022-23, Qantas was the most complained about corporation to the ACCC. The airline is likely to report a multibillion-dollar profit on Thursday.