- Qantas has agreed to pay A$105 million to settle a class action lawsuit over COVID-era flight credits.
- The settlement covers passengers with flights cancelled between 2020 and 2022 who were denied cash refunds.
- Pending court approval, payments are expected to commence in late 2026 via an independent administrator.
(AUSTRALIA) — Qantas agreed on Friday to pay A$105 million (approximately US$74 million) to settle a class action over its use of flight credits instead of cash refunds for COVID-19-era cancellations.
Qantas announced the proposed settlement on March 13, 2026, and said the deal requires approval from the Sue Qatar Airways Over Searches”>Federal Court of Australia and includes no admission of liability.
The case centres on flights cancelled between January 1, 2020, and November 1, 2022, due to COVID-19 restrictions, and on how customers were offered flight credits versus cash refunds.
Hundreds of thousands of Australian passengers on domestic and international itineraries fall within the group covered by the proposed settlement, based on the cancellation window and the flight credits at issue.
Echo Law filed the lawsuit in 2023, with the firm led in the matter by partner Andrew Paull, as Qantas set out in its announcement.
Customers who held those Qantas Launch New Nonstop US-Australia Flights”>Qantas flight credits can claim compensation on top of any prior refunds, under the settlement scheme that still needs court approval.
Echo Law alleged Qantas breached contracts and Australian consumer law, and that it misled customers about refund options compared with credits.
The lawsuit also alleged Qantas withheld customer funds for extended periods and engaged in unconscionable conduct by retaining customer money for years.
Qantas previously rejected the claims, and pointed to the scale of refunds it said it made during the early period of disruption.
The airline said it refunded over $1 billion for 2020 disruptions, as it responded to passenger claims about cancellations and refunds.
Even with the proposed agreement in place, the settlement now moves into a procedural stage that hinges on court oversight and a formal process for notifying affected people.
Federal Court approval will determine whether the settlement becomes binding and how the final scheme distributes money to eligible group members.
Court orders will require notice to group members, and Qantas said the claims process details will be set out in coming weeks.
An administrator will handle the distribution and pay out cash refunds from the settlement fund, rather than Qantas processing individual payments directly under an ad hoc approach.
Qantas said payments will occur in the first half of the 2026-27 financial year (July-December 2026), framing that window as the expected timing for refunds to start flowing.
The company said it will recognise the settlement amount outside Qantas’s underlying earnings, giving investors a sense of how it plans to treat the expense in its financial reporting.
Qantas also tied the proposed settlement to provisions it already carried, saying it had previously provisioned $55 million but increased it to $105 million.
What individual customers ultimately receive will depend on eligibility and the court-approved distribution scheme, with the administrator expected to run the claims and payment structure.
The dispute sits alongside Qantas’ later steps on pandemic-era credits, including a change that altered how long credits could remain open for use or refund.
In August 2023, Qantas removed expiry dates on pandemic credits and allowed indefinite cash refund requests, a policy shift that came after the cancellations that form the core window of the class action.
That policy move addressed the ongoing status of many credits, but the class action alleged earlier conduct still left customers without cash for long periods, depending on the circumstances of their cancellations and options offered.
The proposed settlement also arrives after separate regulatory and financial fallout tied to a different issue involving cancelled flights and ticket sales.
In 2024, Qantas paid A$120 million (US$84.9 million) in penalties and a $20 million remediation program after admitting to selling tickets for already-cancelled flights during 2022-2024.
That earlier remediation program included individual customer payments ranging from $225 for domestic itineraries to $450 for international ones, which Qantas linked to the separate, admitted conduct.
For passengers tracking multiple proceedings, the overlap in timing and documentation can shape expectations about notices, record-keeping, and when instructions arrive, even when the underlying allegations differ.
Qantas shares dipped fractionally on the Australian Securities Exchange after the settlement announcement, in a muted market reaction as the case shifts to Federal Court consideration.
Next steps now depend on the Federal Court approval process, court-ordered notification to group members, and the publication of claim filing instructions and deadlines in the coming weeks.
