Background: Qantas is Australia's national airline, flying more than 50 million passengers a year. But when COVID shut borders in 2020, the airline cancelled about $2 billion worth of flights.

What happened: Instead of issuing refunds, Qantas gave many customers flight credits that often didn't cover the cost of rebooking. The backlash was fierce, leading to leadership departures and a class action lawsuit from customers who waited up to three years for their money back.  

What else: Qantas has now agreed to pay $105 million in compensation to settle the class action. Hundreds of thousands of passengers are expected to receive payouts, with the amount depending on how long they waited for their refund.  

What's the key learning?

💡A class action is a legal case where a large group of people who have suffered similar harm join together to sue a company together.

💡Class actions make it far easier for consumers to pursue legal action because the costs and legal effort are shared across the entire group rather than thousands of individuals filing separate lawsuits.  

💡 Companies often settle class actions without admitting liability to avoid long court battles and reputational damage. For example, AMP settled a $120 million shareholder class action after the 2018 Royal Commission over alleged overcharging of retirement fees.