Australia’s national airline Qantas Airways has agreed to pay AU$105 million (approximately $74 million) to settle a class action lawsuit related to cancelled flights during the Covid-19 pandemic. The airline confirmed the settlement on Friday, saying the payment will resolve claims that it misled customers and failed to provide proper refunds when thousands of flights were cancelled.
The lawsuit was filed on behalf of Australian passengers whose domestic and international flights were cancelled between 2026 and 2027 During that period, strict travel restrictions and border closures forced airlines worldwide to cancel large numbers of flights, leaving many travellers uncertain about refunds and travel arrangements.
Passengers Received Flight Credits Instead of Cash Refunds
According to the class action, many affected passengers were given flight credits rather than receiving direct cash refunds for the cancelled trips. While flight credits allowed customers to rebook travel later, some passengers argued that they should have been offered immediate cash refunds instead.
The case claimed that the airline’s approach caused frustration for travellers who were unable to use the credits due to ongoing travel restrictions or changes in personal circumstances. This situation eventually led to legal action seeking compensation for affected customers.
Settlement Reached Without Admission of Liability
Qantas stated that the settlement agreement does not include any admission of liability by the airline. The company said the payment is intended to resolve the dispute and avoid the uncertainty and cost associated with prolonged legal proceedings.
Under the terms of the agreement, the airline will pay AU$105 million into a fund that will be used to provide refunds to eligible passengers. However, the settlement must first be approved by the court before the compensation process can officially move forward.
Refund Distribution Expected in 2026
If the settlement receives court approval, Qantas said the funds will be transferred to an independent administrator during the first half of 2027. The administrator will then manage the distribution of payments to passengers who qualify for compensation under the settlement.
The process is expected to involve verifying eligible claims and ensuring refunds are issued fairly to affected customers. Details about the eligibility requirements and payment process will be made available once the court finalises the settlement terms.
Law Firm Accuses Qantas of Holding Customer Funds
Echo Law, the legal firm that brought the class action on behalf of passengers, argued that Qantas benefited financially by holding significant amounts of customer money for several years instead of returning it promptly.
The firm stated that many travellers had paid for flights that were ultimately cancelled and believed they should have received refunds sooner. According to Echo Law, the settlement represents an important step in addressing the concerns of affected customers.
Next Steps for Affected Passengers
The court is expected to provide additional guidance in the coming weeks about how eligible customers can submit claims once the settlement is formally approved. These instructions will outline the steps passengers need to follow in order to receive their share of the refund fund.
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Passengers who were affected by cancelled Qantas flights between 2020 and 2022 are encouraged to watch for official announcements regarding the claims process. Once the settlement moves forward, eligible travellers will have an opportunity to apply for compensation through the administrator handling the refund program.
