The consumer watchdog has savaged Qantas for failing to tell customers they were entitled to refunds for flights cancelled due to the pandemic, as the government orders closer monitoring of anti-competitive behaviour of airlines.

Hundreds of passengers have complained to the Australian Competition and Consumer Commission after flights were suspended or cancelled due to travel restrictions and they were given credits rather than refunds.

“From the outset, Qantas did not communicate clearly with customers about their rights and, in a large number of cases, simply omitted they were entitled to a refund,” ACCC chair Rod Sims said on Friday.

“In some cases, the ACCC considers 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.”

Mr Sims said a new email from Qantas to customers in recent days – to “remind” them about their refund rights – came after weeks of pressure from the ACCC.

But the watchdog said even that was “not particularly clear”.

“I think that customers can, and should, expect better from Qantas, particularly when many of those customers may be out of work or experiencing financial hardship,” Mr Sims said.

“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.”

Tweet from @acccgovau

In a statement, Qantas said coronavirus travel restrictions had triggered a previously unseen level of change in recent months. Well over a million bookings had been moved, refunded or turned into credits.

“We’ve worked hard to explain people’s options, especially during the period of time when there were almost weekly changes to where you could fly,” a spokesperson said.

“We didn’t think it was unclear to begin with, but we’ve written again to a group of customers in the window of time that the ACCC is concerned about to make sure they know what alternatives are available to them.

“We hope the ACCC is not inferring that we haven’t done the right thing by our customers, particularly given the efforts we have made to manage an exceptional level of upheaval.”

The airline said Australia’s aviation sector was extremely competitive, and likely to remain that way.

“What the ACCC can expect to find through its monitoring in the near term is Qantas and Jetstar flying its domestic aircraft to generate cash rather than leaving them on the ground costing money,” the spokesperson said.

Treasurer Josh Frydenberg said the government had directed the ACCC to monitor domestic air passenger services for three years.

The direction will allow the watchdog to obtain information, and provide another avenue for Australians wanting to raise concerns about anti-competitive conduct in the domestic air passenger sector.

“[It] will require the ACCC to monitor prices, costs and profits in the domestic air passenger sector,” Mr Frydenberg said.

The competition watchdog’s dressing down comes as Qantas and its subsidiary Jetstar try to reboot domestic travel by offering cut-price airfares and bonus points for frequent flyers.

Jetstar is offering 10,000 one-way fares for $19 on 22 routes, including Melbourne to Sydney, Sydney to Gold Coast, Melbourne to Ballina, Brisbane to Whitsunday Coast and Adelaide to Cairns.

Other routes have also been discounted but not to the same extent.

Qantas is offering triple points for frequent flyers on all routes, and customers of both airlines will also be given more flexibility to change fight dates without being hit with fees, the airlines said in a statement on Friday.

-with agencies