Qantas Ordered To Refund Passengers

It must have been sad to Alan Joyce, the CEO of Qantas after the airline was ordered by the Australian Government to provide refunds instead of worthless IOUs for canceled flights due to Covid-19.

Airlines, not just Qantas, have been fast and loose with passengers whose flights were canceled, trying to offer them credits or vouchers instead of simply refunding their payments (trying to preserve their cash flow).

Here's the announcement from the ACCC:

The ACCC says it is pleased Qantas has begun contacting its customers to tell them they are entitled to a refund for domestic or international flights cancelled or suspended due to COVID-19 travel restrictions.

The ACCC's COVID-19 Taskforce raised concerns with the airline after receiving hundreds of complaints from passengers whose flights were suspended or cancelled due to travel restrictions, but who were given credits by Qantas instead of the refunds they were entitled to.

Qantas' terms and conditions state that customers with fares booked on any of its domestic and international flights are entitled to have their fare refunded if Qantas makes a significant change to their flight, and Qantas cannot offer another booking which is acceptable to the customer.

The ACCC was concerned that Qantas' communications to customers between 17 March 2020 and 31 May 2020 did not adequately inform them of their right to receive a refund.

In some cases, the ACCC considers Qantas' emails may have encouraged these customers to cancel bookings themselves in order to receive a credit when many would have been eligible for a refund.

"We want to ensure that customers are aware that when Qantas suspends or cancels flights due to travel restrictions and fails to provide them with an acceptable alternative flight, they are entitled to a refund," ACCC Chair Rod Sims said.

This decision by Qantas to send a new email to customers in recent days to "remind" customers about their right to a refund follows weeks of pressure from the ACCC, but the ACCC says even the most recent communication is not particularly clear.

"From our perspective, from the outset, Qantas did not communicate clearly with customers about their rights and, in a large number of cases, simply omitted they were entitled to a refund," Mr Sims said.

"We do appreciate that the airline industry globally is significantly impacted by the global COVID-19 pandemic, but I think that customers can and should expect better from Qantas, particularly when many of those customers may be out of work or experiencing financial hardship."

"If any customer in this situation is unhappy with receiving a credit, or no longer wants one due to continuing uncertainty about when flights will resume, we strongly encourage them to contact Qantas and seek a refund," Mr Sims said.

Notes to editors

Clause 9.2 of Qantas' Conditions of Carriage states:

Where we make a Significant Change to your flight due to an Event Beyond Our Control, whether you have checked in or not, we will:

  • use reasonable endeavours to rebook you on the next available flight on our services at no additional cost to you
  • t
  • alternatively, if we are unable to rebook you on services acceptable to you, we will refund the applicable fare.

Now, if someone would tell this to Air New Zealand too, an airline that is holding passenger payments as a hostage. It could be a negotiating tactic to extort cash out from New Zealand government.

Vouchers on Qantas or Air New Zealand are pretty much worthless because it is unclear when these two airlines will start flying internationally. Australian tourism minister stated earlier this week that he doesn't see international tourism until sometime in 2021.

It is an utter disgrace how many airlines have handled these customer refunds. They are happy to take your money, but when it is the time to provide refunds, it can take months, and the airline itself may go under while waiting.

Glad that the Australian Government and the ACCC have made it clearer for Qantas what is the right thing to do.

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