The claim was served upon Jetstar earlier this morning (Wednesday, 21 August).

In a statement, Echo Law partner Andrew Paull said: “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.”

“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 alleges, among other things, that the pandemic-inspired travel restrictions “frustrated” Jetstar travel contracts, causing these contracts to be automatically terminated and giving customers a right to automatically recover money paid under those contracts.

Under Australian law, the firm submitted, an event is “frustrating” if it occurs without default of either party and renders the performance of contractual obligations impossible, or radically different, from what was originally contemplated.

The airline’s failure to issue refunds, the firm continued, “was a breach of contract”.

“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,” the statement said.

VIEW ALL

By holding customer’s funds that ought to be refunded, Echo continued, Jetstar “attained unlawful financial benefit (including from the interest accrued)”.

Moreover, the statement suggested, Jetstar engaged in a “system or pattern of unconscionable conduct”, in what the firm said amounts to a contravention of Australian Consumer Law.

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 onto its customers’ money for flights it had cancelled.

“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.

“This is another unjust enrichment Jetstar has enjoyed.”

The action follows the proceedings brought by Echo Law against Qantas in mid-2023, which alleged that the national carrier unlawfully benefited from not refunding passengers under its COVID-19 credits scheme. Qantas forcefully rejected those claims at the time, and the matter is ongoing.

In October of last year, BigLaw firm Piper Alderman flagged a competing class action against Qantas.

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

“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,” he said.

The Jetstar proceedings are being funded by Australia-based litigation funder Court House Capital.

The funder’s director and chief executive, Michelle Silvers, said: “We are pleased to be funding this action through Echo Law.”

“Class actions allow members of the community the opportunity to access justice and to be compensated for wrongs done to them by larger, well-resourced organisations.”

In a statement received shortly after the publication of this story, a Jetstar spokesperson said: “We’ll review the claims filed in the class action this morning.”

“Last year, we removed expiry dates for COVID vouchers so they can be used indefinitely. These vouchers are also multi-use, meaning they can be used across multiple bookings and for multiple people.”