Qantas Airways Ltd (ASX: QAN) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $8.67. In late morning trade on Friday, shares are changing hands for $8.64 apiece, down 0.3%.
For some context, the ASX 200 is also down 0.3% at this same time.
Here’s what the company just reported.
Qantas shares dip amid $105 million class action news
In a release labelled non-price sensitive for Qantas shares, the airline said it has reached an agreement to settle the class action regarding flight credits during the global COVID pandemic.
The legal action was launched against Qantas in August 2023.
It relates to flights between 1 January 2020 and 1 November 2022 that were cancelled by Qantas. The class action includes allegations that the airline was in breach of its obligations regarding customer refunds.
Qantas said it has agreed to pay $105 million to settle the matter, with no admission of liability. The settlement remains subject to approval by the Federal Court of Australia.
As for the potential impact on Qantas shares, the ASX 200 airline reported that it has previously made a provision for the refund-related lawsuit. Management said an increase reflecting the $105 million settlement will be recognised outside of underlying earnings in the second half of the 2026 financial year (H2 FY 2026).
Qantas noted that in August 2023, it removed the expiry date on flight credits issued during COVID, meaning customers can request a cash refund indefinitely.
What else has been happening with the ASX 200 airline?
Qantas reported its first-half results (H1 FY 2026) on 26 February.
Highlights included a 6% year-on-year increase in revenue to $12.9 billion. And on the bottom line, underlying profit before tax of $1.456 billion was up by $71 million.
But the ASX 200 airline disappointed passive income investors by cutting its fully-franked interim dividend by 25% to 19.8 cents per share. This could help explain the 9.2% decline in the Qantas share price on the day of the results release.
Looking ahead, Qantas CEO Vanessa Hudson said, “By consistently delivering strong earnings growth we’re able to continue investing in the largest fleet renewal in our history.”
Hudson added:
Around 60% of Jetstar’s increase in profitability in the half was driven by its new aircraft, through a combination of growth, new network opportunities and the redeployment of existing aircraft onto other routes.
This gives us confidence in the benefits that will flow once Qantas’ new aircraft reach scale.
The post Qantas shares flying through $105 million legal turbulence appeared first on The Motley Fool Australia.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.