Australian low-cost carrier Jetstar Airways (JQ, Melbourne Tullamarine) is facing a class action lawsuit in the country's Federal Court based on allegations that it failed to refund customers' payments for cancelled international flights between 2020 and 2022, despite being legally obliged to do so.
The firm behind the suit, Echo Law, is a small legal firm headquartered in Melbourne that is best known for launching a similar lawsuit against Qantas (QF, Sydney Kingsford Smith) in 2023, which remains ongoing. Jetstar and Qantas are part of Qantas Group, and both generated significant adverse publicity during and after the pandemic for their conduct concerning cancelled flights, refunds, and credits. Australian-based litigation funder Court House Capital is funding the Jetstar lawsuit, formally known as Kaye Perkins v Jetstar Airways Pty Limited (case no: VID816/2024) and filed in the court's Melbourne registry on August 20, 2024.
Specifically, the Jetstar class action alleges that:
- travel restrictions ‘frustrated’ Jetstar travel contracts, causing the contracts to be automatically terminated and giving customers a right to automatically recover money paid under those contracts. Under Australian law, an event is ‘frustrating’ if it occurs without default of either party and renders the performance of contractual obligations impossible or radically different from what was originally contemplated;
- Jetstar’s failure to issue refunds was a breach of contract;
- Jetstar engaged in misleading or deceptive conduct in contravention of Australian consumer law, by misleading customers as to their rights in the event of widespread Covid cancellations;
- by holding customers’ funds that ought to be refunded, Jetstar attained unlawful financial benefit (including from the interest accrued); and
- Jetstar engaged in a system or pattern of unconscionable conduct, in contravention of Australian consumer law.
"By acting in this way, Jetstar has enjoyed significant financial benefits at its customers’ expense," Echo Law's online solicitation to potential complainants reads. "We consider that affected Jetstar customers may be entitled to compensation, even if they have used the travel credits they were issued."
"We’ll review the claims filed in the class action," a Jetstar spokesperson told ch-aviation. "Last year we removed expiry dates for Covid vouchers so they can be used indefinitely. These vouchers are also multi-use, meaning they can be used across multiple bookings and for multiple people.”
Twelve months ago, Jetstar Airways CEO Stephanie Tully appeared before an Australian government senate committee and said the carrier was holding onto about AUD100 million Australian dollars (USD67 million) in unused travel credits, around half of which were for AUD100 (USD67) or less, rendering the process of contacting customers too laborious and expensive. At the time, the Qantas Group proposed cancelling and pocketing all unused travel credits across the group's airlines, then valued at more than AUD500 million (USD336 million), at the end of 2023. The company later dropped the plan due to a fierce public backlash.
According to ch-aviation PRO airlines data, Jetstar flies to 39 airports in 12 countries. Its 83-strong fleet includes fifty-one A320-200s, six A321-200s, three A321-200NX, twelve A321-200NX(LR)s, and eleven B787-8s. Its most recent set of numbers, for the six months to December 31, 2023, recorded an 84% increase in pre-tax profit to AUD325 million (USD219 million) compared to the same period in 2022.
