The settlement is subject to court approval and details of how customers can claim refunds will be made soon, said Echo Law, the legal firm leading the class action.

The firm had alleged that Qantas breached its contracts with customers by failing to provide cash refunds for cancelled flights in a timely manner, and instead offered travel credits.

The airline engaged in “misleading or deceptive conduct” over the rights of customers over their cancelled flights in violation of Australian law, Echo Law said.

By doing so, Qantas “unlawfully benefited from customers by holding for years a very significant amount of customer funds that ought to have been refunded,” it added.

Qantas said in its statement that in 2023 that it had removed the expiry date on flight credits issued during the pandemic so that customers could request a cash refund right away.

The airline told investors in its half-year report that it expected to pay A$55m to settle the case.

Echo Law is leading a similar class action lawsuit against Australian budget carrier, Jetstar, over allegedly issuing customers travel credits that were worth less than the refunds that customers were entitled to.

“By acting in this way, Jetstar has enjoyed significant financial benefits at its customers’ expense,” said Echo Law.

BBC News understands that Jetstar is continuing to defend the case.

Qantas was fined a record A$90m in August 2025 for illegally sacking more than 1,800 ground workers during the pandemic.

The penalty was the largest ever imposed by an Australian court for violations of industrial relations laws.

At the rime, Qantas said it had agreed to pay the fine and that the ruling holds it accountable for actions that caused “real harm” to its employees.

“We sincerely apologise to each and every one of the 1,820 ground handling employees and to their families who suffered as a result,” Qantas Group chief executive Vanessa Hudson said.

(BBC)