Travellers hoping to get reimbursed with travel credits by Qantas ran into some difficulties after the pandemic. Now, the company itself is in hot water and many of its customers couldn’t be happier. 

The Australian airline giant Qantas is now embroiled in a class action lawsuit over its handling of customer refunds for flights cancelled because of the COVID-19 pandemic. The lawsuit, issued by class action firm Echo Law, hopes to get the airline to issue refunds for any remaining flight credits and compensate for lost interest on customer money.

Echo Law accused Qantas of misleading or deceptive conduct, particularly in how the airline communicated with its customers during the early days of the pandemic. According to the legal firm, Qantas failed to clarify its customers’ rights whose flights were cancelled because of COVID-19 restrictions.  

They have also charged the airline with breaching its contract by being slow to give its customers their cash refunds. Andrew Paull, partner at Echo Law, told reporters, “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.”

The lawsuit also claims that the airline has come out ahead financially by holding onto its customer funds that should have been issued as refunds. According to Paull, Qantas used the funds to gain financial benefits while its customers’ pockets suffered during the pandemic.

On top of it all, Echo Law came after the airline’s flight credit scheme, which it said imposed strict conditions for using credits. Some customers have had to pay significantly more than the original booking to redeem these credits and were pressured by the airline to do so or risk losing them. 

Qantas has tried to defend itself from these allegations. In a public statement, the airline said it had already processed over $1 billion in refunds from COVID credits. Qantas also said its COVID credit policy is one of the most flexible among its competitors, highlighting that they’ve extended the expiry dates for these credits three times.

The airline noted that around $400 million in COVID credits remained unspent, and 80% of its affected customers could get refunds if they wanted. Qantas said that it has been encouraging customers who wish to get a refund to contact them directly.

The class action lawsuit, backed by class action funder CASL, comes when Qantas is already under scrutiny for other issues. In January it dropped a serious mayday call involving a failed engine. Then, in the same month, a string of mechanical issues forced several of its planes to turn back. This year, the company became the year’s most complained about company to the Australian Competition and Consumer Commission (ACCC). 

Echo Law has called for disgruntled customers to join the lawsuit, even if they have already used their flight credits.

As the airline prepares to announce this year’s financial results, this lawsuit adds another layer to its challenges. If the courts prove Echo Law’s allegations, the lawsuit could set a precedent for how airlines manage customer funds during crises, potentially changing industry standards for the better.