Jetstar Airways is facing a class action lawsuit over allegations it did not refund payments to customers whose flights were cancelled during the Covid pandemic, with lawyers claiming the airline was legally obliged to do so.
The legal action is headed by Echo Law, which served the claim on the Qantas-owned airline on Wednesday morning, the law firm said in a statement.
Echo partner Andrew Paull claimed the airline had put “profits ahead of its customers’ interests”.
“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,” Paull said.
“The right thing for Jetstar to do when it cancelled all those flights was to return its customers’ money without delay.”
Echo is pursuing Jetstar owner Qantas in separate proceedings started last year over its refund policy for cancelled flights, which involved the airline’s use of travel credits.
The Jetstar action is financed by litigation funder Court House Capital.
A Jetstar spokesperson said the airline would review the class action claims.
“Last year we removed expiry dates for Covid vouchers so they can be used indefinitely,” the spokesperson said.
The vouchers can be used across multiple bookings and for multiple people.
The legal argument centres on claims that the use of travel credits, as opposed to refunds, was neither transparent or in keeping with the contractual terms of the ticket purchases.
Jetstar also engaged in a “system or pattern of unconscionable conduct” that breached consumer law, Echo Law claims.
Paull said the airline financially benefited because it could use the money deposited for cancelled flights.
“It now needs to be held accountable and refund that money with interest,” Paull said.
“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 on to its customers’ money for flights it had cancelled.”
