Hundreds of thousands of passengers could be in line for a cash boost after Qantas settled a class action brought over its issuing of flight credits instead of cash refunds for cancelled COVID-19 flights.
The airline was accused of breaching contracted refund obligations to customers who had flights binned by travel restrictions between the start of 2020 and November 2022.
Qantas on Friday announced a $105 million settlement to the lawsuit, which is subject to approval by the Federal Court of Australia.
A notice will be sent to hundreds of thousands of customers covered by the class action, with compensation amounts depending on how much they paid for the cancelled flights and how long they were held out of money, either before they used a credit or received a refund.
The exact payouts will also depend on how many customers came forward to claim their share, Echo Law partner Andrew Paull said.
"For typical customers, these are amounts in the hundreds of dollars, potentially higher for people with with larger flight purchases," he told reporters on Friday.
"These are not individually gigantic sums but they're meaningful sums, particularly at a time when people are doing it tough."
Under the settlement terms, the airline makes no admission of liability.
Echo Law filed the class action against Qantas in 2023, alleging it misled customers about their refund options, withheld funds and engaged in a "pattern of unconscionable conduct".
The firm accused Qantas of breaching Australian consumer law by failing to immediately issue refunds and retaining customers' funds when flights were cancelled in 2020.
Eligible customers would be able to seek compensation on top of any existing refund rights, Mr Paull said.
Court orders will be sought to directly notify affected group members via email and SMS, including details on how they can claim a share of the settlement if approved.
"(The process) can take a little bit of time, but we would expect it may be in the second half of the year," Mr Paull said.
The airline initially rejected the class action's claims, declaring it refunded more than $1 billion to customers impacted by flight disruptions in 2020.
Qantas launched a campaign to encourage customers to use remaining flight credits before removing the expiry date in August 2023 so customers could indefinitely request a cash refund.
The carrier noted it had previously provisioned for the lawsuit and payment was expected in the first half of the 2026/27 financial year.
Qantas shareholders appeared unfazed by the announcement, with shares only fractionally down after the Australian Securities Exchange opened on Friday.
Mr Paull said the outcome was in everyone's interest.
"It has taken a couple of years to get to this point, but the reality is, if litigation is formed all the way, it can take much longer," he said.
The airline's budget carrier, Jetstar, was also hit with a class action over travel vouchers issued to hundreds of thousands of customers for COVID-cancelled flights, which it continues to defend.
Qantas reached a separate agreement with the consumer watchdog in 2024 to pay $100 million in penalties for misleading consumers by offering and selling tickets for flights it had already decided to cancel.
It committed to a $20 million remediation program, with compensation payments ranging from $225 for domestic passengers to $450 for international flyers.Â