Press Release: Qantas Settles Flight Credit Class Action

Key Takeaways

• Qantas to pay $105 million to settle class action
• Settlement covers flights cancelled Jan 2020‑Nov 2022
• No liability admission; court approval pending
• Covid credits now have no expiry, refundable indefinitely
• Payment recorded FY26, disbursed FY27

Summary

Qantas has agreed to settle the class action over Covid‑era flight credits for $105 million, pending Federal Court approval. The lawsuit covered bookings cancelled between 1 January 2020 and 1 November 2022, alleging breach of refund obligations. In August 2023 the airline removed expiry dates on those credits, allowing customers to claim cash refunds indefinitely. The settlement will be recorded outside earnings in the second half of FY26, with payments expected in the first half of FY27.

Pulse Analysis

The Covid‑19 pandemic forced airlines worldwide to issue travel vouchers as a stop‑gap for cancelled flights, and Qantas was no exception. Customers who received "Covid Credits" faced uncertainty when the airline initially set expiration dates, prompting consumer groups to sue over alleged contract breaches. Legal scrutiny intensified as regulators examined whether airlines were obligated to provide cash refunds under existing consumer protection statutes, setting the stage for a high‑profile class action that spanned two years of bookings.

Qantas’s $105 million settlement resolves the dispute without admitting liability, a common outcome in large consumer class actions. The airline will recognize a provision for the settlement outside of underlying earnings in the second half of FY26, reflecting prudent accounting treatment that isolates the charge from core operating performance. Funds will be transferred to a court‑approved administrator, with disbursement slated for the first half of FY27. This timing aligns with Qantas’s broader financial planning, allowing the carrier to manage cash flow while still addressing the outstanding consumer claims.

Beyond the immediate financial impact, the resolution signals a shift in how carriers handle post‑pandemic credit obligations. By eliminating expiry dates and offering indefinite cash refunds, Qantas is likely aiming to rebuild brand trust and preempt further litigation. The settlement may also influence industry peers, prompting a reassessment of credit policies and legal risk management. For investors and travelers alike, the outcome underscores the importance of transparent consumer compensation practices in an era where regulatory and reputational pressures are increasingly intertwined.