Flight Centre clung to its $300 COVID fee until the ACCC moved — the backflip cost $80M

In April 2020, with borders shut and April sales running at 5–10 per cent of normal levels, Flight Centre was still applying its controversial $300-per-person cancellation fee to bookings travellers cancelled because of COVID-19. The practice drew widespread outrage; aggrieved customers organised toward a class action, and the competition regulator ACCC threatened legal action. On 2 May 2020 the agency announced it would waive the fee on COVID-affected cancellations.

The bill arrived quickly. In a statement to the ASX on 4 May, Flight Centre said it believed it would lose 'in the vicinity' of $80 million from the decision, and its shares closed down 6.26 per cent at $9.42. It had submitted 100,000 refund requests to airlines and repaid 48,000 customers, with around 77,000 further refunds outstanding across itineraries spanning hotels, tours and airlines; roughly 30 per cent of customers were leaving money on file rather than taking refunds. Managing director Graham Turner said the company made 'no revenue as a result of this decision'.

The backflip landed inside a wider reckoning. Law firm Slater and Gordon was gathering expressions of interest for a class action against airlines, travel agents and tour companies it accused of short-changing 'tens of thousands' of Australians — pushing vouchers that could be unusable, imposing blanket no-refund clauses despite ACCC warnings, and taking payment for international flights while government advice said do not travel.

The $300 fee fell on cancellations caused by the pandemic itself, so every charge read as taxing customers for a disaster they did not cause.

It held the position until force arrived: the waiver came only after the ACCC threatened legal action and customers started organising a class action.

It defended the fee at the exact moment it needed goodwill for the recovery, with domestic travel expected to reopen within months and Flight Centre positioning itself to lead it.

Charging trapped customers to escape a disaster converts a cash-flow squeeze into a trust and regulator problem — the fee you finally surrender costs more than the fee ever earned.

Flight Centre said it would process roughly three years' worth of cancellations across the six weeks either side of the announcement, and about 30 per cent of customers accepted travel credit instead of refunds, easing the cash cost. Slater and Gordon's industry-wide class action reached the expression-of-interest stage, with travellers reporting losses of thousands of dollars. The company told investors it expected a boost once Australian interstate borders reopened, with domestic travel about half its normal Australian leisure volume and the overwhelming majority of corporate volume.