QANTAS: Settles COVID flight cancellation class action for AU$105 million

Qantas has agreed to pay $105 million to settle a class action brought by passengers whose flights were cancelled during the pandemic, potentially delivering compensation to hundreds of thousands of customers.

The settlement relates to flights scheduled between 1 January 2020 and 1 November 2022, when global travel collapsed due to COVID-19-related restrictions. The settlement still requires approval from the Federal Court of Australia, and it contains no admission of liability by Qantas.

The dispute involves refunds versus travel credits

At the heart of the case was Qantas’ decision during the pandemic to issue restricted flight credits instead of cash refunds when flights were cancelled. Passengers argued they were contractually entitled to refunds, but instead received credits that were often difficult to use due to ongoing travel restrictions and uncertainty.

The class action was brought by Echo Law. Eligible customers will be identified using airline booking records and contacted directly about their rights once the settlement process proceeds.

Additional compensation on top of refunds

The $105 million settlement comes on top of earlier commitments by Qantas to refund unused pandemic-era travel credits.

In August 2023, amid mounting public criticism, the airline removed expiry dates from $570 million worth of COVID travel credits issued on tickets purchased up to 30 September 2021.

Under the class action settlement, eligible passengers may now claim compensation in addition to any refunds they have already received.

Part of a turbulent period for the airline

The case dates back to the leadership of former CEO Alan Joyce, whose tenure ended with uproar in September 2023 following intense scrutiny of the airline’s handling of customers during the pandemic, and his long-term bonus payments. Joyce, after an arguably stellar reign at Qantas, ended in considerable disgrace, regarded by many as trashing the iconic Australian airline’s reputation.

Joyce was replaced by current CEO Vanessa Hudson.

The settlement follows another major case involving the airline. In May 2024, Qantas agreed to pay $120 million in penalties and compensation after action by the Australian Competition and Consumer Commission over the sale of tickets for flights that had already been cancelled — widely dubbed “ghost flights”.

What happens next

If approved by the Federal Court, the settlement could see hundreds of thousands of affected passengers compensated.

Qantas and the legal representatives involved in the case are expected to contact eligible travellers directly, while affected customers can also register their interest with the legal team managing the class action.

2PAXfly Takeout

This agreement almost brings to an end the perceived inequities orchestrated under the command and control of the later reign of Qantas CEO Alan Joyce. Although seen as revolutionising the airline in some respects, the pandemic seemed to herald an ignominious end for the whip-smart executive.

If you are interested in the saga of the Alan Joyce reign, then there are some excellent books out there. The two I have read and would recommend are the 2023 ‘Alan Joyce and Qantas: The Trials and Transformation of an Australian Icon‘, authored by Peter Harbison, Derek Sadubin. It verges on hagiography, but is a decent read. But for enjoyment and evidenced criticism, ‘The Chairman’s Lounge: The inside story of how Qantas sold us out‘ by the entertaining Joe Aston.

We await the Alan Joyce tell-all memoir, scheduled for publication by Hardie Grant as early as mid-to-late 2026, although some scources say 2027.