Airline Cancelled Your Flight and Won’t Refund? How to Claim a Cash Refund, Not Credit

The airline cancelled. Not you, them. And instead of your money, they’ve handed you a “travel credit” with conditions, an expiry date, and fare rules that mean the same flight now costs twice as much. When you ask for a refund, you get a link to a form that leads to another form, or a chatbot that explains why credit is “more flexible”.

It’s not more flexible. It’s their cash, sitting in their bank account, that used to be yours. Australian law and the ACCC are increasingly clear that when an airline cancels, you’re entitled to your money back.

Your rights

• Consumer guarantees (ss 60–62 ACL). Carriage is a service. When the airline cancels and can’t supply the service, that’s a failure to supply within a reasonable time and, in most cases, a major failure. Under s 267 ACL you’re entitled to a refund.
• Contract law. If the airline cancels for reasons within its control (crew, scheduling, commercial), it has failed to perform the contract and you’re entitled to your money back. The airline’s conditions of carriage almost always provide for a refund on airline-initiated cancellation, even if the customer-service script pushes credit.
• Misleading conduct (s 18 ACL). Telling you that you’re “only entitled to a credit” when the terms and the law say otherwise is misleading. In 2024, Qantas agreed to pay $100 million in penalties and compensation over conduct relating to cancelled flights. The ACCC has also secured undertakings on credit expiry from major airlines.
• Frustration. Where an event outside both parties’ control (border closures, for example) makes performance impossible, the contract is frustrated. In New South Wales, Victoria, and South Australia, frustrated contracts legislation entitles you to recover money paid. Elsewhere, common law does.
• Card chargeback. “Services not rendered” is a valid chargeback reason for a cancelled flight. The clock typically runs 120 days from the scheduled flight date, not the booking date.
• The Aviation Customer Rights Charter. Introduced under the Australian Government’s Aviation White Paper reforms, it sets expectations including prompt refunds for cancellations within the airline’s control. An Aviation Industry Ombuds Scheme is being established with power to direct refunds.

What to do right now

1. Keep the cancellation notice. Email, SMS, app notification. It should state the airline cancelled. If it gives a reason, note it.
2. Refuse the credit in writing. Reply to the airline (email or their complaint form): “I do not accept a travel credit. The airline cancelled this flight. I require a full refund to my original payment method within 14 days under the Australian Consumer Law and your conditions of carriage.”
3. Check the conditions of carriage. Find the clause on airline-initiated cancellation. It will almost always say “refund”. Quote it back to them.
4. Raise a chargeback. Call your bank with the booking confirmation and the cancellation notice. Do this in parallel; it’s often the fastest route.
5. Send a Letter of Demand. A formal letter to the airline’s Australian entity citing ss 18, 60–62 and 267 ACL, the relevant conditions of carriage clause, and the ACCC’s enforcement position, with a quantified refund amount (plus any consequential loss like non-refundable accommodation) and a 14-day deadline before a fair trading complaint and tribunal claim.
6. Escalate. Airline Customer Advocate, state fair trading, ACCC report, and then the tribunal. For a foreign airline, you can sue in Australia for a flight to or from Australia.

Credits, “flexible” fares and other things to refuse

• Travel credits with expiry dates. After ACCC pressure, the major Australian airlines extended or removed expiry on COVID-era credits, but new credits often still expire. If the airline cancelled, you don’t need to accept a credit at all.
• “We’ve rebooked you” on a flight that doesn’t suit. You can refuse a rebooking that’s materially different (different day, unreasonable times, extra connections) and take the refund instead.
• Refund of the “base fare” only. Taxes, fees and charges are refundable too. So is any seat selection, baggage, or add-on you paid for on the cancelled flight.
• “Your fare was non-refundable.” That applies when you cancel. It has no bearing on airline-initiated cancellation.
• Refund “processing time” of 8–12 weeks. No law allows this. 14 days is a reasonable demand, and chargeback runs in parallel.

Consequential losses. If the cancellation cost you non-refundable accommodation, a missed cruise, event tickets, or a car hire you couldn’t use, those are potentially recoverable under the ACL where the cancellation was within the airline’s control (crewing, aircraft availability, commercial decisions). Weather and air traffic control are outside their control and consequential loss is harder, though the refund of the fare itself is still yours. Travel insurance usually covers consequential loss for either cause, so claim there too.

Booked through an agent or website. Your contract is with the agent as well. Agents sometimes hold the refund and deduct “administration fees”. A fee for processing an airline-initiated refund is almost certainly an unfair term; demand the full amount from the agent and copy the airline.

Points bookings. If you paid with frequent flyer points, you’re entitled to the points back plus any cash component, without a redemption fee.

Who to complain to

Airline Customer Advocate (participating Australian airlines). ACCC (they actively monitor airline refund conduct). State fair trading / consumer affairs. AFCA if your bank refuses the chargeback. The Aviation Industry Ombuds Scheme once fully operational. For travel agent or booking-site purchases, they are also a supplier and your refund claim can be against them.

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