Air travel across the world was thrown into chaos during the Covid-19 pandemic, as airlines cancelled thousands of flights and scrambled to manage refund requests. In Australia, one of the country’s largest carriers is now facing the financial consequences of decisions made during that turbulent period.
Qantas Airways has agreed to pay A$105 million (about $74 million) to settle a class action lawsuit brought by passengers whose flights were cancelled during the pandemic but who were offered travel credits instead of cash refunds. The settlement, which still requires court approval, relates to cancellations between 2020 and 2022 and is expected to compensate affected customers in the coming months.
The case highlights the broader tensions that emerged during the pandemic between struggling airlines and travelers seeking reimbursement. According to reporting from BBC News, the settlement amount is nearly double what the airline had previously anticipated paying when it disclosed the legal risk in its February financial results.
Class Action Claims Qantas Withheld Cash Refunds
The lawsuit was filed on behalf of passengers who argued that Qantas should have issued cash refunds when flights were cancelled during the height of the pandemic. Instead, many travelers received travel credits, which could be used to book future flights but did not immediately return their money.
Echo Law, the firm leading the class action, alleged that the airline breached its contractual obligations by failing to provide timely refunds. The firm also argued that the airline engaged in misleading or deceptive conduct regarding customers’ rights when their flights were cancelled.
According to BBC News, Echo Law stated that the airline unlawfully benefited by holding significant sums of customer funds for years rather than returning them promptly. The legal action sought compensation for passengers who were forced to accept credits instead of receiving the cash refunds they believed they were entitled to under Australian law.
Qantas said it agreed to the settlement without admitting liability. In a statement released on Friday, the airline confirmed the A$105 million agreement and said further details about how eligible customers can claim refunds will be announced once the court approves the settlement. The airline had previously told investors it expected to pay around A$55 million to resolve the dispute, meaning the final settlement figure is almost twice that earlier estimate.
Broader Legal and Regulatory Scrutiny of the Airline
The refund case is not the only legal challenge facing the Australian flag carrier. In recent years, the airline has been under increasing scrutiny from regulators and courts over its handling of workers and passengers during the pandemic.
According to BBC News, Qantas removed the expiry dates on travel credits issued during Covid-19 in 2023, allowing customers to request cash refunds instead of being forced to use the credits within a limited time frame. The policy change came after widespread criticism from passengers who struggled to redeem their credits as travel restrictions shifted.
At the same time, Echo Law is pursuing a separate class action against Jetstar, Qantas’s low-cost subsidiary. The lawsuit alleges that Jetstar issued travel credits that were worth less than the refunds customers were entitled to receive. BBC News reports that Jetstar is continuing to defend the case.
Qantas has also faced penalties related to employment decisions made during the pandemic. In August 2025, an Australian court fined the airline A$90 million for illegally dismissing more than 1,800 ground workers. The ruling marked the largest penalty ever imposed in the country for violations of industrial relations laws.
At the time, Qantas acknowledged the impact of the decision on employees. The airline’s chief executive, Vanessa Hudson, said the company accepted the ruling and apologized to the workers and their families who were affected.
