Qantas has come under fire after customers discovered they were being charged significantly more when booking with a flight credit.
Over recent weeks, both A Current Affair and ABC News have accused Qantas of price gouging, with some customers claiming they had to pay triple the regular price to redeem their flight credit for a new booking.
In one example highlighted by the ABC, Qantas required a customer to pay more than $1,400 for a return flight from Adelaide to Brisbane when redeeming a flight credit from a trip they previously had to cancel due to COVID-19 border closures. But seats on the same flights were publicly available for just $437 return.
So, what’s going on?
Qantas gave customers additional flexibility during the pandemic
Since the start of the pandemic, Qantas has encouraged customers with cancelled flights to accept a flight credit instead of a refund.
To give people the confidence to book new flights, Qantas also introduced a Fly Flexible policy in 2020. This policy has been continuously extended and is still in place now.
Under Fly Flexible, Qantas is waiving change fees an unlimited number of times for customers who need to change their flights (any fare difference still applies). Alternatively, customers can opt for a flight credit if they are no longer able to travel.
Throughout most of 2020 and 2021, Qantas also made flight credits more flexible to allow customers to redeem their vouchers for multiple bookings. This meant customers who had to cancel expensive long-haul Business Class bookings still had reasonable options to use this value towards domestic flight bookings while the international border was closed, without forfeiting thousands of dollars. Qantas also extended the validity of flight credits beyond their usual 12-month expiry, giving people more time to use them.
If you received a Qantas flight credit for a booking originally made on or before 30 September 2021, these more flexible rules still apply. But the rules changed on 1 October 2021.
Qantas changes to flight credits from October 2021
If your Qantas flight credit was for a cancelled flight booked on or after 1 October 2021, the old pre-COVID rules now apply.
This is what the Qantas Flight Credits webpage says:
In other words, you can now only redeem a flight credit for another booking of the same or higher value. You can also only use your flight credit towards one new booking.
In the case of the customer who wanted to use their flight credit for flights from Adelaide to Brisbane, the booking they had originally cancelled was worth $1,400. Therefore, Qantas would only let them book a new ticket worth at least that amount using their credit voucher.
The following additional conditions also now apply to Qantas flight credits, which now expire after 12 months:
The ABC reports that when asked about this at a press conference, Qantas CEO Alan Joyce said the accusations of price gouging were “absolute nonsense”.
“The flight credit scheme, the way it actually works, if you decide you’re not travelling, it goes into a credit, and this is giving people more flexibility than they’ve ever had because of COVID. But, you get the exact same as what you paid for,” Joyce said.
On this issue, a Qantas spokesperson said earlier this month that the airline is “completely transparent” about its rules surrounding credits, and that “other major airlines have a similar approach.”
The spokesperson also said that “if there are extenuating circumstances, we encourage people to talk to us”.
It’s not exactly clear how people are supposed to do this when the Qantas call centre doesn’t answer the phone. Even so, if you are lucky enough to get through to somebody, the staff are not actually empowered to help and just recite the booking conditions.
Are these rules reasonable?
On one hand, all Qantas has done here is revert to the old rules that applied to flight credits before the pandemic. In fact, the new rules under Fly Flexible are slightly better for customers because they don’t have to pay an additional fee to cancel non-flexible bookings.
It’s also true that Qantas states on its website that the new fare amount must be of equal or higher value when redeeming a flight credit.
On the other hand, the travel landscape is now completely different to how it was just a few years ago. Just because a policy was in place prior to COVID-19, doesn’t mean it was fair then and doesn’t mean it still makes sense in 2022.
Why shouldn’t Qantas customers be able to use their flight credits to book new flights worth the same amount as the value of their credit – even if it’s across multiple bookings?
There is an argument that this would allow customers to cancel their flights and rebook at a lower price if a flight went on sale after they booked. But surely there is a way to get around this which doesn’t involve making customers pay 300% more to redeem their flight credit than they would otherwise pay to make a new booking.
As one AFF member posted on our forum:
Nothing wrong legally… but ethically?
QF demands 100% flexibility from its passengers to cancel flights, cancel routes, determine how much and when they will refund you, the ability to substitute planes, cabins and services… yet if the passenger needs flexibility through no fault of their own they stand to lose significantly.The contractual protections and special rights which the airlines have claimed – and Aussie law supports – date back to the days of DC3s and the difficulty of airline operations 50 years ago.
– MEL_Traveller, 2 February 2022
Another person wrote:
I know it is in the conditions that you can only use the credit for a higher priced fare, but that is really a pretty savage condition that takes advantage of Qantas’s market power relative to the low power of the consumer. Also, I think most people are not aware of what this really means until it is time for them to try to use the credit.
– Seat0B, 14 February 2022
Don’t opt for a flight credit
Because of these changes to Qantas flight credits, we’d suggest avoiding them where possible. If you need to change your booking, try to change the date rather than requesting a flight credit with these conditions.
If your flight has been cancelled by Qantas, also remember that you have a right to a full refund. Qantas may try to offer you a flight credit, but if the airline has cancelled your flight, you should push for a refund instead.
So, what are other Australian airlines doing?
Despite Qantas’ claims that it is following standard industry practice, other Australian airlines do not have this policy.
Virgin Australia also gives its customers the option to change their flight for free or cancel for a flight credit if they can longer travel due to COVID-19. Virgin travel bank credits are valid for 12 months too, but can be treated like cash towards an unlimited number of new bookings. Virgin also allows travel banks to be used to book flights for other people, which Qantas does not allow.
Rex still offers a COVID Refund Guarantee which allows customers to request a refund (minus Rex’s booking fees) if you can no longer travel for any COVID-related reason, even if the Rex flight operates as scheduled.
Air New Zealand, which does not give refunds for flights cancelled by the airline, also lets customers redeem their flight credits towards multiple new bookings.
Join the discussion on the Australian Frequent Flyer forum: Qantas Accused of Price Gouging
