Travel agency Flight Centre has averted court action by the consumer watchdog and agreed to drop its cancellation fees and refund customers that have already been charged.
The Australian Competition and Consumer Commission has welcomed Flight Centre's change in policy after the watchdog received more than 6000 complaints.
The travel agent had come under heavy criticism for charging up to $300 per booking for travel cancelled because of the COVID-19 pandemic.
Flight Centre will refund thousands of customers who, from 13 March, were charged $300 per person to get a refund for a cancelled international flight or $50 for a domestic flight, the ACCC said in a statement.
The refunds also apply to cancellations fees charged by Aunt Betty, Travel Associates, Student Universe, Universal Traveller and Jetescape Travel (trading as Byojet Travel), which are part of the Flight Centre group.
The ACCC said its next step would have been court action if Flight Centre did not change its stance.
"This is a very welcome move made by Flight Centre for thousands of customers impacted by COVID-19 travel cancellations," ACCC Chair Rod Sims said.
"We are continuing to discuss issues in relation to refunds and cancellations with the travel sector, and encourage travel providers to treat consumers fairly in these exceptional circumstances."
"We ask consumers to remain patient and be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone."
Australian Associated Press