Melbourne-based litigation firm Echo Law has launched a class action against Qantas (QF, Sydney Kingsford Smith) on behalf of passengers who had paid for flights that were cancelled due to Covid-19.
The largely unknown legal entity, which describes itself as a non-traditional outcome-focused law firm, says it has secured AUD850 million Australian dollars (USD547 million) in class action payouts since its founding, with the biggest wins coming from class actions against Australia's big four banks. They lodged the class action against Qantas in Australia's Federal Court on August 21. Litigation funder CASL is backing the law suit.
Echo Law says Qantas customers were entitled to cash refunds for their cancelled flights. Instead, Qantas issued most of those customers with difficult-to-use travel vouchers featuring fixed expiry dates. "Accordingly, those credits were of much lower value to customers than the refunds to which they were entitled," Echo Law says on their class action website. "By acting in this way, Qantas has enjoyed significant financial benefits at its customers' expense. We consider that affected Qantas customers are entitled to compensation, even if they have used the credits they were issued."
Qantas gained a notorious reputation in its home country during and after Covid-19 for its handling of refunds from cancelled flights. At one point, the airline held approximately AUD2 billion (USD1.3 billion) in passenger funds. Echo Law also says Qantas received a material financial benefit (interest) from holding onto this money, which it was not entitled to. The Australian Competition and Consumer Commission has noted that in 2022, Qantas was Australia's most complained about company.
A Qantas spokesperson told ch-aviation the airline "completely rejected" Echo's allegations. Qantas says it is actively encouraging people to use their credits. In most cases, passengers can convert credits into cash refunds (to which they were originally entitled under Australian consumer law). The airline has now whittled down the unclaimed amount to approximately AUD400 million (USD258 million).
"We’ve built a new online tool to make it easier to find Covid-era credits, set up a dedicated hotline and streamlined the refunds process," said Qantas Group Chief Customer Officer Markus Svensson last month. "We’ll keep reaching out directly to customers, particularly ahead of these credits expiring at the end of this year.”
Echo Law partner Andrew Paull says Qantas should have stepped up the refunds process three and a half years ago. Currently, travel credits are set to expire on December 31, 2023. Before then they can be used to book flights up until December 19, 2024. Paull claims Qantas will keep any unclaimed credits. ch-aviation has approached Qantas for further comments.
