Jetstar faces class action over flight credits

Jetstar is facing a class action lodged on behalf of hundreds of thousands of customers whose flights were cancelled during the Covid-19 pandemic.

The claim, which was lodged in Federal Court by Echo Law, alleges Jetstar failed to refund customers’ payments for cancelled flights, despite being legally obliged to do so.

Echo Law partner Andrew Paull said the airline carrier had put profits before customers by failing to provide refunds.

“Jetstar promotes itself as a values-driven, low fare airline committed to helping ‘more people fly, more often’, yet it’s a highly profitable part of the Qantas Group, and when Covid caused widespread flight cancellations it put those profits ahead of its customers’ interests,” Mr Paull said.

“Jetstar customers were pushed into holding hundreds of millions of dollars in restricted travel credits, even though this wasn’t what those customers had agreed to as part of the airline’s terms and conditions.

“The right thing for Jetstar to do when it cancelled all those flights was to return its customers’ money without delay.”

The claim, which was served on Jetstar on Wednesday, also alleges the customers were legally entitled to automatically recover money paid for their tickets because the Covid travel restrictions automatically terminated those “contracts”.

Echo Law alleges Jetstar’s failure to issue refunds was a breach of contract and attained unlawful financial benefit by offering travel credits instead of refunds.

A Jetstar spokeswoman said the airline would review the claim filed on Wednesday.

“Last year we removed expiry dates for Covid vouchers so they can be used indefinitely,” she said.

“These vouchers are also multi use, meaning they can be used across multiple bookings and for multiple people.”

While the credits were never redeemable for cash, the airline previously announced it had removed expiry dates from all Jetstar Airways Covid vouchers from August 2023.

However, Mr Paull said Jetstar engaged in misleading or deceptive conduct in contravention of Australian Consumer Law, by misleading customers as to their rights in the event of widespread Covid cancellations.

“Many Jetstar customers ended up paying the airline more than their original booking to use their credits on new fares, as they were led to believe they had little choice but to do that or else lose the value of the flights they paid for,” Mr Paull said.

Echo Law also separately commenced another class action against Qantas in 2023 over its Covid credits program, which is ongoing.

Mr Paull said both class actions seek refunds and compensation for customers.

“Like Qantas, we allege Jetstar breached the law by failing to be transparent and by failing to refund its customers,” he said.

“It held onto ordinary Australian’s money and expected customers to just be happy with credits, which we allege it was not entitled to do. It now needs to be held accountable and refund that money with interest.

“While customers sat at home not able to enjoy the benefits of flying, Jetstar enjoyed the significant financial benefits of holding hundreds of millions of dollars in customer payments including interest and reduced borrowing costs.

“It is unfair, and we allege unlawful, that Jetstar profited from holding onto its customers’ money for flights it had cancelled.”