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Qantas owes customers more than $470 million for cancelled flights

Qantas boss Alan Joyce was grilled by the Senate on Monday.

Qantas boss Alan Joyce was grilled by the Senate on Monday. Photo: AAP

Qantas Group still owes at least $470 million in flight credits to flyers who had their trips cancelled during COVID-19 closures, it has been revealed.

Appearing before a tense Senate hearing on Monday afternoon, Qantas boss Alan Joyce was grilled about what the national carrier still owes customers, several years after its controversial flight credit scheme began.

Mr Joyce has repeatedly said that Qantas owes $370 million in credits, a claim that was repeated last week when the airline reported a huge profit.

But when pressed by Labor Senator Tony Sheldon on Monday afternoon, Mr Joyce and Jetstar chief Stephanie Tully admitted that figure counted only Qantas’ domestic flyers and not Jetstar or international customers.

It turns out about $100 million extra is still owed to Jetstar customers, while another still undisclosed sum is owed to shafted international flyers.

“One of the reasons we can’t answer you specifically is that figure changes every day because people are refining it and using it every day. Jetstar is around $100 million,” Ms Tully said.

Senator Sheldon accused Qantas Group of failing to be transparent about its controversial flight credit scheme, which was the subject of a probe by the consumer regulator and even a recently filed class action lawsuit.

Alan Joyce and Jetstar CEO Stephanie Tully at the Senate hearing on Monday. Photo: AAP

Mr Joyce failed to disclose how much was owed to international flyers, opting to take the question on notice, which drew the senator’s ire.

“You have not been transparent when I have learned there is another $100 million above the $370 million, something like $50 million for these overseas credits,” Senator Sheldon said.

“It is not being transparent. I would have thought coming to this hearing that you would be prepared for very obvious questions.”

Qantas has been accused of using its flight credit scheme as a no-interest loan from customers during COVID amid allegations it misled customers about the program, and failed to pay out amounts owed in a timely manner.

A class action lawsuit alleges that the airline enriched itself at the expense of its customers and put its bottom line ahead of their interests during the pandemic border closures.

Remaining flight credits will expire at the end of the year, even if they have not been claimed by flyers who had their trips cancelled during COVID lockdowns.

Ms Tully, when asked about how many credits will be left over after the deadline, replied “our intention is there is zero left”.

She said there had been an extensive advertising campaign by Qantas Group about the credits.

Mr Joyce said Qantas will next week begin sending text messages to flyers about unclaimed credits, adding that the biggest issue the airline has is those which are held through travel agents.

Qantas grilled on Qatar lobbying

Mr Joyce was also grilled on Monday about Qantas lobbying against a recent bid from Qatar Airways to increase international flights to Australia.

Mr Joyce confirmed the national carrier wrote to the federal government to lobby it against the bid, which was ultimately rejected in July.

The denial has drawn criticism from tourism groups, who argue more flights into Australia would help push down the price of airfares.

However, Mr Joyce claimed it would have “distorted” the market as other airlines were trying to increase their international flight capacity back to pre-COVID levels.

Mr Joyce failed to explain why granting Qatar extra capacity would distort the market, when pressed by Greens Senator Fatima Payman.

“We need to make sure it is fair and balanced and that Australia protects its national interest when traffic rights are granted,” Mr Joyce said.

“That is what we are saying, and that has been the decision of many Australian governments going back through a long period of time.”

Senators weren’t buying the Qantas argument, accusing the national carrier of looking after its bottom line at the expense of consumers.

“Industry experts and commentators from right around the country have said that had Qatar been granted those additional routes that the cost of [flights would] have gone down,” Coalition Senator Jane Hume said.

Mr Joyce was also asked whether the blocking of Qatar’s bid would have boosted Qantas’ profits, but declined to provide a clear answer.

Qantas rival Virgin released a statement on Monday afternoon – as Mr Joyce was giving evidence – to slam the decision to deny Qatar’s bid.

(Virgin partners with Qatar on international flights, while Qantas partners with Emirates).

“Denying Qatar additional flights keeps airfares between Australia and Europe unnecessarily higher than need be,” Virgin’s spokesperson Christian Bennett said.

“Blocking Qatar damages the domestic and international competitive position of Virgin Australia in favour of Qantas.”

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