Qantas Forced to Offer Refunds for Cancelled FlightsThe Australian Competition & Consumer Commission (ACCC) has forced Qantas to contact customers issued with flight credits to inform them of their entitlement to a refund. This includes customers that opted to cancel their booking for a voucher before Qantas cancelled their flight.

The ACCC alleges that Qantas failed to adequately inform customers of their right to a refund in communications between 17 March and 31 May 2020. Qantas also pressured some customers into cancelling their bookings for a credit themselves, so they would lose their right to a refund when Qantas later cancelled their flights.

It appears Qantas is now offering refunds for credits issued for flights originally scheduled to depart between 17 March and 31 May. But some customers have been offered incentives such as extra value on their vouchers, extended flight credit validity and even bonus status credits if they opt to retain their flight credit rather than taking the refund. If you think you’re entitled to a refund, it’s worth calling Qantas to ask.

In fairness to Qantas, most airlines globally have avoided using the word “refund” in communications with customers about flights cancelled due to COVID-19. But that doesn’t mean customers are not legally entitled to one.

According to the section 9.2 of the Qantas Conditions of Carriage, passengers are entitled to a refund for flights cancelled due to events beyond the airline’s control if alternative flights offered are not acceptable to the customer.

Following weeks of pressure from the ACCC, Qantas is now sending emails to “remind” customers of their right to a refund if Qantas cancelled their flight. But the ACCC says that even Qantas’ 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,” ACCC Chair Rod Sims said.

“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,” Sims said.

In its defence, Qantas told news.com.au in a statement that it hoped the ACCC wasn’t inferring it had done the wrong thing by customers “particularly given the efforts we have made to manage an exceptional level of upheaval”.

“We’ve written again to a group of customers in the window of time that the ACCC is concerned about to make sure they know what alternatives are available to them,” Qantas said.

A waiting game…

Australian Frequent Flyer informed Qantas and Jetstar customers as far back as 23 March that they are entitled to a full refund for flights cancelled by the airline.

In April, Qantas pressured customers booked to fly before 31 July 2020 to request a credit voucher by the end of the month. Qantas warned customers that no longer wished to travel that they would have to pay cancellation fees if they didn’t request a flight credit by 30 April. As we said at the time, this was somewhat misleading because Qantas was still selling flights for June and July that would later be cancelled. Qantas was likely hoping that customers due to travel in June or July would request a voucher before Qantas cancelled their flights in early May.

In cases where Qantas initiates the cancellation, customers are still being issued automatically with flight credits. But customers can request a full refund instead by contacting Qantas. As a result, if your flight is not yet cancelled, your best option is to simply wait for the airline to do it.

Join the discussion on the Australian Frequent Flyer forum: Qantas Revenue booking cancellations (under covid19)

The ACCC also could have done more

The ACCC is treating this latest move by Qantas as a victory, and it certainly is an improvement. But, in our view, the consumer watchdog is also not blameless.

“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 is now saying.

Yet back in March, the ACCC issued guidance that warned government travel restrictions could impact consumers’ rights. “However, if the event, flight or travel service is cancelled due to government restrictions, consumer rights under the consumer guarantees may be impacted,” the ACCC website said at the time.

Many travel businesses, including Virgin Australia and Flight Centre, used this ACCC guidance as justification not to provide refunds – even if this contravened Australian Consumer Law or the business’ own refund policy. The ACCC did later warn businesses that they cannot retrospectively change their refund policies, and Flight Centre did eventually reverse its controversial cancellation fee policy.

But many thousands of Virgin Australia customers missed out on refunds that they were legally entitled to. Virgin has now paused issuing refunds anyway due to entering voluntary administration on 21 April. But even a month before it was in voluntary administration, it was refusing to issue refunds for flights cancelled by the airline. At the time, Virgin specifically cited the ACCC guidance as justification for its policy, which was likely illegal.

Australian Frequent Flyer contacted the ACCC about Virgin’s problematic refund policy in early April. They declined to comment publicly and did not take action against Virgin Australia.

The ACCC is also monitoring domestic airfares

In other news, the federal government last Friday asked the ACCC to closely monitor domestic airfares, capacity, aviation costs and airline profits for the next three years. The government is worried that airfares could increase over time and that airlines could engage in anti-competitive behaviour, particularly in the context of the current situation with Virgin Australia.

For example, Jetstar launched a sale offering $19 fares on Friday. This is obviously a great deal for customers that managed to score one of the cheap airfares, which sold out within 4 hours. But regularly offering below-cost airfares could have the effect of pushing competing airlines out of the market – leading to higher fares in the long term.

Regional Express (Rex) has been complaining a lot lately that Qantas may be engaging in anti-competitive behaviour against them – although that’s nothing particularly new. It whinged back in February that Qantas had pushed them out of markets like Ballina and Kangaroo Island, and was trying to do the same in Orange.

Then, following Qantas’ announcement two weeks ago that it would triple domestic capacity in July, Rex announced it would match Qantas in resuming daily services – but only begrudgingly, and only on routes where it competes directly with Qantas.

“It is with great reluctance that we are adding so much additional flying so soon that doesn’t match demand. Today we are still seeing a 90% drop in passenger numbers and we would normally gradually increase our flying schedule in tandem with the growth in passenger numbers so as to minimise losses. In ports where Rex is the sole provider, we have no plans to increase capacity significantly in the immediate future,” Rex Chief Operating Officer Neville Howell said.

“However, QantasLink’s aggressive new published schedule for July, announced with great fanfare yesterday, compels us to match this move so as not to be squeezed out of the market.”

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]

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Ffbaby boomer

Thanks for the update. Wondering if the Qantas refund emails are likely to spread to Jetstar vouchers ? Sorry if I missed this detail anywhere

Ano

I am currently out of pocket for $6700 for two business tickets. I am wondering how to proceed with legal action against Qantas to recover my money. They agreed to refund me back in early April and nothing has happened since. Even then they said I would not be receiving $1200 of my money for cancellation fees.

john

keep on their case, you will get your refund

Andrew

Matt, I was surprised to learn that the entire top level of public servants at the ACCC have been gifted Chairman’s Lounge memberships! One observant AFFer posted the SMH link early on in one of the VA administration threads. If that is not a potential conflict of interest I don’t know what is. Even perhaps more interesting is that the ACCC commission a report into Loyalty Reward schemes from a company intimately involved (by its own admission) in helping to set them up and provide regular service to. Is that a bit like asking to murderer to catch themselves and… Read more »

nfw

Shocked I tell you, shocked. Imagine public servants accepting such blatant conflict of interest freebies, especially as the as usual taxpayer funds it all.

john

the ACCC are asleep at the wheel, knee jerk reaction when months ago they were talking refunds or credit vouchers. Pity they did not issue a directive then, and also enforce this current rule onto the international airlines like Malaysia. Air France/KLM have finally caved after weeks of saying no refunds notwithstanding their obligations under EU rules.

James

We contacted virgin early April and refused a refund by flight centre as Virgin were required to give authorisation to release the funds. Now we are expected to play the whee of fortune if our money will even be acknowledged by the new owners. We can’t rebook as looking after a disabled person. We planned this almost a year before needing NDIS funding and a live in carer to essentially lose our money. Virgin didn’t care in April and now can fallback on being in administration giving customers the run around. Since April to even now, Virgin continue to say… Read more »

Sharon

I phoned Qantas months ago when they cancelled my flight in May and request a refund in probs. About 6 weeks later money in the bank.
Had a cruise booked with scenic and they have told me I can have my money refunded 31 Dec 2022..
ACCC not interested.

Tom Bartley

Thanks, great inside info👍

Tai CHAN

I booked a Qantas flight from Sydney to HK on 23/10/2010 but was told that it was cancelled..Then I rebooked the flight on 09/11/2010 at the Qantas office and was given itinerary but somehow two days later, I was informed that I was given flight credit instead of the rebooked flight.,leaving me no choice but to accept it.

Katie

Do you know what the status is for flights booked between NSW & QLD? Are they going ahead regardless of the QLD border closure? I have Jetstar flights booked Sydney to Cairns 11 July and unsure if Jetstar will fly if the borders aren’t open. Obviously hoping for a flight credit if borders stay closed beyond the 10 July urgently being referred to in the press.

Baz Archer

Hi Matt I have Qantas talking to me on Messenger – back in early March I think it was, they asked me if I’d like to swap my business ADL – LHR rtn for a credit, which I agreed to. Then they cancelled the flights. I’ve been offered a refund now that I’m in touch with them (thank you for the heads up) but minus $600 because in their words I cancelled before they cancelled the flights. I’m a bit upset that they value 22 years of FF with QF, the last seven or eight at platinum and a lifetime… Read more »

Tom Andrews

I am also on the same boat so to speak. Took the credit, but the flight was cancelled later on. Having spoken to QF on Messenger, they quoted the same answer ($600 cancel fee). If we can still get the refund, how do you think should we proceed? Talking to them on Messenger is not going anywhere. ACCC? Slater & Gordon?