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Qantas has reached a significant settlement worth millions to put an end to a class action lawsuit concerning its controversial COVID-19 flight credits.
The legal action alleged that the airline failed to honor its contractual obligations to refund customers for flights cancelled from early 2020 until November 1, 2022.
On Friday, Qantas disclosed a $105 million settlement, which now awaits approval from the Federal Court of Australia. Importantly, the agreement does not entail any admission of guilt by the airline.
Qantas mentioned that provisions had already been made for this lawsuit, and the increased amount will be recorded separately from its core earnings in the latter part of the fiscal year.
Investors seemed largely indifferent to the news, as Qantas shares saw a slight decline at the opening of the Australian Securities Exchange on Friday.
Echo Law filed the class action against Australia’s national carrier in 2023, alleging the airline misled customers about their refund options, withheld funds and engaged in a “pattern of unconscionable conduct”.
The firm alleged Qantas breached Australian consumer law by failing to immediately issue refunds and retaining customers’ funds when flights were cancelled in 2020.
The airline rejected the claims at the time, declaring it had 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 after Australia’s consumer watchdog indicated a probe into the issue was almost complete.
In August 2023, Qantas removed the expiry date on flight credits issued during the pandemic, meaning customers could indefinitely request a cash refund.
Echo Law said it was “pleased” to confirm the settlement.
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