Jetstar Airways Faces Class Action Over Refund Failures for Cancelled Flights

Jetstar Airways is currently embroiled in a significant class action lawsuit filed in Australia’s Federal Court. The lawsuit, initiated by Melbourne-based Echo Law, accuses the airline of failing to refund customers for international flights cancelled between 2020 and 2022. The legal challenge, officially named Kaye Perkins v Jetstar Airways Pty Limited (case no: VID816/2024), was lodged on August 20, 2024, highlighting ongoing discontent with airline refund practices post-pandemic.

Echo Law, known for its aggressive litigation tactics, including a notable ongoing class action against Qantas—Jetstar’s parent company—alleges multiple legal breaches by Jetstar. These include contract frustration due to travel restrictions from COVID-19, which they claim should automatically trigger refunds under Australian law, breach of contract for not issuing said refunds, misleading conduct about consumer refund rights, unlawful financial gain from retained customer funds, and unconscionable conduct in violation of Australian consumer law.

The class action asserts that Jetstar’s refusal to issue refunds allowed the airline to unfairly profit at the expense of its customers. Echo Law has made a public appeal, stating, “Jetstar’s actions have allowed it to benefit financially at the expense of its customers. Affected customers may be entitled to compensation, even if they have used their travel credits.”

In response to the lawsuit, a Jetstar spokesperson stated, “We will review the claims in the class action. We removed expiry dates for Covid vouchers last year, allowing them to be used indefinitely and for multiple bookings.” This statement reflects the airline’s attempt to mitigate the issue by extending the usability of vouchers provided instead of refunds.

Jetstar’s CEO, Stephanie Tully, previously disclosed that the airline had around AUD100 million (USD67 million) in unused travel credits, noting the logistical challenges and costs associated with contacting customers for refunds. The Qantas Group had even considered cancelling all unused travel credits, valued at over AUD500 million (USD336 million), but retracted the plan following public backlash.

Jetstar operates a diverse fleet of 51 A320-200s, 6 A321-200s, 3 A321-200NX, 12 A321-200NX(LR)s, and 11 Boeing 787-8s.

Despite the legal challenges, the airline reported a robust 84% increase in pre-tax profit for the six months ending December 31, 2023, totaling AUD325 million (USD219 million). This lawsuit casts a shadow over Jetstar’s recent financial successes, underscoring the broader implications of how airlines manage customer relations and legal obligations during unprecedented global disruptions. The outcome of this case could set a significant precedent for airline operations and consumer rights, particularly in how carriers handle large-scale flight cancellations and refunds.

Sources: AirGuide Business airguide.info, bing.com, Jetstar Airways