Facing claims for billions of dollars in refunds over cancelled flights, Qantas is rolling out incentives to encourage passengers to choose travel credit against a future trip rather than claw back their cash.
Executive Traveller readers are reporting offers of up to 20% of the value of their booking being added to their travel credit balance, along with the ability to earn twice as many frequent flyer points or status credits.
Qantas typically sees around $14 billion in annual revenue from its domestic and international flights.
However, travel restrictions and border closures stemming from the coronavirus pandemic has seen the airline slashed its domestic schedule to around 20% of pre-COVID levels, while CEO Alan Joyce says international flights are “unlikely to restart before July 2021.”
In addition, Qantas has pulled almost all international flights from October 2020 to March 2021 from its website.
This is considered a precursor to the flights themselves being officially cancelled, which would open the floodgates for passengers to claim a full refund instead of travel credit – leaving the airline on the hook for an estimated $4 billion in refunds on outstanding international bookings.
20% bonus value, double status credits
Sydney-based financial professional Chris Quick held close to $2,000 in bookings for flights to Brisbane and Auckland, which were subsequently cancelled by Qantas, and tells Executive Traveller he was offered a choice between double Qantas Points or double status credits if he opted for credit instead of a refund.
Kyla Holley, a health professional working out of Coffs Harbour, says Qantas put “a number of last minute ‘deals’” on the table after her eagerly-awaited October 2020 trip to Tokyo was scrapped.
These included “an extra 20%” on the value of the travel voucher “or double status credits.“
"However, with over $7,000 already held in vouchers, I pushed for the refund,” Holley relates.
"I’m still loyal to Qantas and appreciate the challenges they are facing, but I do feel they are stalling refunds for cashflow. The problem is that those of us running businesses have the same cashflow issues, but can’t get away with these sort of delay tactics.”
Two other Executive Traveller readers, who preferred not to be named, reported offers of 20% in additional travel credit and double status credits, with the latter applying to all travellers on a multi-passenger booking; another said he was offered a flat 100 status credits on top of a voucher, rather than a refund.
What Qantas says
Qantas’ pro-forma communication says “we have a current offer for selected customers who are impacted by COVID 19 to keep their bookings in credit.”
Three options are listed as being
- adding 10% to the value of the travel credit, or
- attaching double points to any bookings made using the travel credit, or
- attaching double status credits to any bookings made using the travel credit.
However, as indicated by the experiences of some Executive Traveller readers, there’s clearly scope for the value of the travel voucher to be boosted a 20% with double points or double status credits also attached.
A Qantas spokesperson described these incentives to Executive Traveller as being among a roster of “special offers” made available to some passengers to add extra value to a flight booking or a credit.
In the past this has included double points and status credits for flights to new destinations such as Ballina, or for bookings made through a Qantas Business Rewards account.
“We know there is a lot of pent up demand for travel and offers like these allow them to do so when they are ready at an even better rate,” the Qantas spokesperson told Executive Traveller.
“As flight restrictions ease and more customers start looking to rebook their travel in the coming months, we’ll have other special offers to share with our customers to add extra value to their flight credit.”
Executive Traveller understands that these sweeteners are not being offered to all passengers seeking a refund, although Qantas indicated there was no ‘eligibility criteria’ such as the value of the booking or the passenger’s frequent flyer status.
If that’s the case, we’d suggest that any Qantas passenger with a cancelled flight who's willing to consider travel credit instead of a refund flight should push to have additional value, points or status credits to seal the deal.
Qantas travel credits are currently valid until the end of 2022 and can be split across multiple bookings, such as several domestic flights, instead of being restricted to a single booking.
Qantas, ACCC clash over refunds
As previously reported, Qantas and Australia's consumer watchdog have clashed over refunds for flights cancelled by the airline due to the coronavirus pandemic.
The stoush took root in Qantas' first wave of cancellations from mid-March 2020 as Covid-19 took hold and the federal government announced a mandatory 14-day quarantine for all arriving passengers.
By the end of the month Qantas had grounded all scheduled international flights, while domestic services were also pared back as demand collapsed and states began to close their own borders.
While Qantas emailed all passengers booked on those flights, the Australian Competition & Consumer Commission maintains that the wording of the emails sent between 17 March 2020 and 31 May 2020 "did not adequately inform them of their right to receive a refund."
Instead, the ACCC considers that Qantas’ emails "may have encouraged these customers to cancel bookings themselves in order to receive a credit when many would have been eligible for a refund."
"If any customer in this situation is unhappy with receiving a credit, or no longer wants one due to continuing uncertainty about when flights will resume, we strongly encourage them to contact Qantas and seek a refund," suggests ACCC Chair Rod Sims.