Qantas is back to jumbo profits after a pandemic dip. Photo / Paul Estcourt
It has been revealed that Qantas still holds more than $500 million in unclaimed pandemic flight credits, after a class action lawsuit highlighting the scale of the Covid credit pot.
The half a billion dollars in airfares held on behalf of Qantas and Jetstar passengers were due to expire by the end of the year.
Last week Melbourne firm Echo Law launched a class action on behalf of Qantas passengers, which was lodged in the federal court over the airline’s handling of passenger refunds during the pandemic.
Qantas Group, which operates Jetstar and Qantas flights, reported a record return to profit of AU$1.74 billion after tax, the first positive full-year profit on the company ledger since 2019.
The airline says the annual report does not reflect the outstanding credits.
Outgoing chief executive Alan Joyce gave the the value of unclaimed Covid credits at around $400m (AU$370m) but on Monday it was revealed the true value was much higher as the figure did not include credits held by Jetstar or customers outside Australia.
The airline boss was issued a summons to appear at the Australian Senate during a cost-of-living inquiry. There it was revealed that Qantas Group held at least a further $100m in credit, according to Jetstar CEO Stephanie Tully.
These credits, held on behalf of passengers affected by pandemic disruption, were due to expire on December 31, 2023.
The airline, which had extended the credits thee times already, removed the expiration on Thursday afternoon and pledged to double the number of Frequent Flyer Points earned on flights booked using historic Covid credits.
“We’re doing this because we’ve listened. The Covid refund process was not as smooth as it should have been,” Joyce said.
“People lost faith in the process.”
Andrew Paull, a partner at the Echo Law, told the Herald they intend to sue the airline over the alleged mishandling of the credit scheme.
“We expect this includes a significant number of NZ customers,” said Paull.
At the moment, the focus of the challenge is on airfares transferred to credit with Qantas between January 2022 and November 2022. However, a number of other airlines implemented a large-scale credit scheme during the pandemic, including Air New Zealand.
”The lawfulness of those schemes depends on the specific circumstances of that airline,” said Paull.
Consumer rights watchdog Consumer NZ says they are raising the issue of expiring flight credits directly with Air New Zealand.
“Unfortunately, airlines in New Zealand can get away with offering credits because of our weak consumer protection laws for cancelled flights,” said Consumer NZ’s Campaigns manager Jessica Walker.
“If the credits expire, consumers will be getting nothing for their money. We think this is unfair.”
There are passengers who are likely to still have thousands of dollars tied up in airline credits, says Walker who believes this should not be allowed to expire.
A spokesperson for Air New Zealand said that the airline was confident it provided clear information to customers on the terms and conditions of the credits throughout the pandemic.
“We have been flexible with our credit usage and adapted over time as needed to meet the changing circumstances of the pandemic,” they said.
“We encourage customers to use their credits and to contact us if they have any questions or concerns.”
The Qantas group said that it could not process automatic refunds because of the timeframe of the pandemic. Passenger credit card details may have changed, and the mix of codeshare arrangements and payment methods means it will not be possible to issue refunds without a claim, it said.
It is up to customers to find and claim credit held by the airline.
Depending on the terms of the fare booked, some credits may be non-refundable and must be used on a flight.
In June the airline established a webservice “Find My Credit” which allowed customers to see their credit accounts with Qantas and Jetstar. Passengers require their booking reference and surname to find unspent credit, from up to three years.
Qantas has set up a dedicated travel credits hotline that can be contacted on 1300 171 505.
This story was updated at 4pm to reflect Qantas’ decision to remove credit expiry dates