Australia’s national carrier has agreed to a $105 million settlement over allegations it short-changed hundreds of thousands of customers by issuing restricted flight credits instead of cash refunds for flights cancelled during the pandemic.
Qantas has reached an agreement to settle the class action brought against it in the Federal Court in August 2023 over its handling of COVID-era flight credits.
Under the terms of the deal, Qantas will pay $105 million with no admission of liability. The settlement is subject to approval by the Federal Court of Australia.
The class action, filed by Echo Law, covered flights scheduled to depart between 1 January 2020 and 1 November 2022 that were cancelled by Qantas. It alleged the airline breached its contractual obligations by issuing customers with restricted flight credits rather than the cash refunds they alleged they were contractually entitled to.
What was the dispute about?
When COVID-19 travel restrictions grounded flights across Australia and internationally from early 2020, Qantas cancelled hundreds of thousands of bookings. Rather than refunding passengers in cash, the airline issued travel credits, many of which came with restrictions on how and when they could be used.
Echo Law argued those customers had a contractual right to cash refunds. The firm’s partner Andrew Paull said the settlement represented a significant outcome.
“This is a very significant financial settlement which will see compensation put into the hands of hundreds of thousands of Qantas customers,” Paull said.
“The settlement sum is in addition to Qantas’ public commitment, given shortly after the class action was commenced in August 2023, to provide refunds to all COVID credit holders.”
That last point is worth noting: the $105 million sits on top of any existing refund rights. Customers who already received a refund or used their credits may still be eligible for additional compensation under the settlement.
How does this fit into the bigger picture?
This is the latest in a series of costly legal outcomes for Australia’s national carrier stemming from its pandemic-era conduct, led by then-CEO Alan Joyce.
In May 2024, Qantas agreed to a $120 million settlement with the ACCC over its “ghost flights” saga, where the airline admitted to advertising tickets for thousands of flights it had already decided to cancel. That deal included a $100 million penalty and roughly $20 million in customer compensation.
In August 2025, the Federal Court ordered Qantas to pay $90 million for illegally outsourcing 1,820 ground-handling workers during the pandemic.
Combined, the three matters represent more than $315 million in penalties, settlements and compensation tied to decisions Qantas made during COVID.
What happens next?
The parties will seek court orders to directly notify affected customers of the settlement and their rights, including how eligible group members can claim their share if the court approves the deal.
Qantas says it had previously made a financial provision for this matter. An increase reflecting the $105 million settlement will be recognised outside of underlying earnings in the second half of FY26, with payment to a court-approved settlement administrator expected in the first half of FY27.
Echo Law has also filed a similar class action against Jetstar over the same issue. That case remains ongoing.
KARRYON UNPACKS: The $105 million settlement is separate from, and additional to, any refunds Qantas has already paid or committed to COVID credit holders. For advisors, the key detail is that eligible customers whose flights were cancelled between January 2020 and November 2022 may be entitled to compensation even if they’ve already used their credits or received a refund. Court-approved notices with claim details are expected to follow.
