Airlines Worldwide Face Class Action Lawsuits Over Missing Cash Refunds & Ongoing Flight Sales

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Several airlines all over the globe are now in hot water through class action lawsuits at the moment as they owe billions of dollars  in cash to customers but often only offer future flight vouchers or simply don’t process due refunds.

Some carriers are also continuing to sell flights despite a high likelihood that these flights will never take off with the customers then not only lose their flights but also their money.

The way airlines have been handling their distribution channels hasn’t been pretty in recent months and that doesn’t just pertain to the refunds directly from airlines but also authorizations to OTA/Travel Agencies and the initial sale of flights where it’s all but certain if they will every take off.

Meanwhile several regulators including the U.S. Department of Transportation as well as the European Commission have made clear the passengers are entitled to prompt refunds in CASH, not travel vouchers and most airlines (although some *might* try their best) have been ignoring that reminder or purposely put the refund process on ice, finding excuses why they can’t process at the moment.

As I expected it wouldn’t take very long at all for the first lawsuits to be files and John wrote in early April that the first airline facing such a suit would be United.

As a reminder here the full lawsuit against United:

Download (PDF, 1.48MB)

But this isn’t the only one as anticipated. Since April a range of plaintiffs and their law firms have lined up against carriers to either file on their own or as a class action as well.

Here are some further examples:

But this is just in the U.S. which is traditionally very active in litigation.

In the UK airlines are also facing headwind as SPG Law, the law firm that has already taken on British Airways over their data breach fiasco, is now actively engaged in a new class action in order to go after refunds.

You can access SPG Law’s landing page for this class action here.

The firm promises to go after refunds of which the client will get 100% as well as claiming damages of which the firm will take a 50% cut.

By joining action and instructing claim experts SPG Law, you have the best chance of ensuring that you achieve full compensation.

We do everything for you and make your claim simple.

We operate on a no-win, no-fee basis, and unlike other law firms, we cap our fees and we aim to recover a cash refund and damages for stress and inconvenience. All clients will receive 100% compensation for the cost of their flight and we will take 50% including VAT of damages for distress, inconvenience and the unlawful conduct of the airlines.

The conduct of many carriers has been nothing but deplorable but my good guess is that they took very well into account that even if they get sued and have to pay a few million in damages that would still be cheaper than a loan from a financial institution if they’d even get it plus all the due diligence work involved. A cheap but immoral way to solve your cash crunch. I’d have no problems participating in this suit provided the refund process doesn’t extend itself over it.

Another suit is waiting for airlines in Australia where law firm Slater+Gordon is planning to go after Qantas and other carriers that caused their customers hardship.

S+G outlined the basis for going after Qantas et al as follows:

Issuing ticketholders on cancelled flights with travel vouchers rather than cash refunds.

This may be a breach of the airline’s ‘Conditions of Carriage’, which oblige the airline to either rebook the customer on an acceptable alternative flight or, if this is not possible, provide a cash refund to the customer.

Relying on blanket ‘no refund’ clauses in its terms and conditions.

The ACCC has previously warned Qantas, Jetstar, Virgin and Tigerair that these clauses will not always be binding. The ACCC has accepted court-enforceable undertakings from each of these airlines, who committed to reviewing their refund policies and compliance programs.

We also consider that ‘no refund’ clauses may not be valid if the agreed contract of travel has been ‘frustrated’ by an event such as COVID-19.

Inducing customers to exchange their tickets for restricted travel vouchers.

The airlines have presented this as an act of generosity, however many customers will have had greater rights if they had held on their ticket than if they exchanged it for a restricted travel voucher. By doing so, the airlines may have misled their customers and engaged in a system of unconscionable conduct.

Continuing to offer and accept payment for international flights.

For example, Qantas and Jetstar have promoted flights to Bali as early as 1 June 2020, despite Government advice that the current travel bans will remain in place for the long term. This may breach the prohibition in the Australian Consumer Law on ‘wrongly accepting payment’ for a service when it is reasonable to expect that service will not be able to be provided.

Consumers who are owed money by their airline and possibly incurred damages they are able to claim can of course pursue this in civil court on an individual basis as well. It comes with the condition attached that as a single customer you might have to face legal costs such as for court fees and attorneys.

Conclusion

The game of using customers money as a free bridge loan for several months – we’re talking Billions here depending on the size of the airline – is truly global and highlights a problem with the aviation business model. Just two months after the COVID crisis truly began to resonate globally airlines around the world are either going bankrupt or are unwilling / can’t afford to refund customers their money anymore. Something needs to change here!

While I don’t expect much in terms of damages when an individual customer signs up for a class action lawsuit (unless you’re the lead plaintiff) I rather have it that the airline has to pay a good chunk to a law firm than nothing at all. Regular are apparently unwilling or unable to make the airlines give us our money back so off to court!

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