Qantas, Australia’s largest airline, has been ordered by the Federal Court to pay $100 million in penalties for misleading consumers by selling tickets for flights it had already decided to cancel. The case, brought by the Australian Competition and Consumer Commission (ACCC), also revealed that Qantas failed to promptly inform existing ticketholders of the cancellations, further exacerbating the situation for consumers.
The penalties were agreed upon after Qantas admitted to breaching Australian Consumer Law (ACL). The airline and the ACCC made joint submissions to the court, acknowledging that the substantial fine was necessary to act as a deterrent to both Qantas and other businesses, reinforcing the importance of consumer protection under the ACL.
“This is a significant penalty that sends a clear message to all businesses, large or small, that they will face serious consequences if they mislead their customers,” said ACCC Chair Gina Cass-Gottlieb.
COMPENSATION FOR AFFECTED CONSUMERS
Alongside the penalty, Qantas has committed to paying around $20 million to consumers who purchased tickets for flights that were already cancelled, or who were rebooked onto such flights after their original reservations were scrapped. This compensation comes in addition to any alternative flights or refunds Qantas may have already provided to affected customers.
Eligible consumers are encouraged to check their eligibility by following steps outlined in communications from Qantas. Payments will range from $225 for domestic and trans-Tasman flights, to $450 for international flights. Qantas and Deloitte, which is overseeing the remediation process, have contacted most affected passengers, who have until 6 May 2025 to claim their payments.
QANTAS KNEW ABOUT THE PROBLEM AND BENEFITED
Qantas admitted that senior management knew cancelled flights were not being promptly removed from sale and that customers continued booking tickets on flights that were no longer operating. They also acknowledged that ticketholders weren’t immediately notified of cancellations, and flight details remained available in Qantas’ ‘Manage Booking’ system for days after the cancellations, misleading customers into thinking their flights were still operational.
By continuing to sell tickets for cancelled flights and delaying notifications, Qantas generated revenue from consumers who may have otherwise opted for cheaper or alternative airlines. Additionally, the delay in addressing system issues allowed Qantas to avoid the associated costs of an earlier resolution.
HOW QANTAS BREACHED AUSTRALIAN CONSUMER LAW
Qantas breached the ACL by engaging in deceptive conduct and making false or misleading representations regarding more than 82,000 flights scheduled between May 2022 and May 2024. This occurred in two main ways:
Qantas continued selling tickets for flights for two or more days after deciding to cancel them.
Flight details remained visible to ticketholders in the ‘Manage Booking’ system for days without any indication the flights had been cancelled.
On average, tickets for cancelled flights remained on sale for 11 days, with some instances extending up to 62 days after the cancellation decision. The delay in notifying ticketholders also averaged 11 days, with some passengers waiting up to 67 days for official confirmation of the cancellation.
CONSUMER REMEDIATION PROGRAM
Qantas has undertaken to pay affected consumers through a court-enforceable consumer remediation program. Most eligible passengers were contacted by 10 July 2024 and can submit their claims through a secure online portal hosted by Deloitte. Payments will be made within 60 days of submission and acceptance of payment information.
If the total amount paid to consumers does not reach $20 million by the end of the remediation period, the remaining balance will be donated to a charity approved by the ACCC.
QANTAS SYSTEMS UPDATED
Following the commencement of proceedings, Qantas implemented changes to its operating and scheduling systems to prevent similar issues in the future. The airline also committed to enhancing its compliance programs to ensure such breaches do not occur again.
“A large, well-resourced company like Qantas should have had robust systems in place to prevent these issues,” Ms. Cass-Gottlieb stated. “However, we are pleased that Qantas has since made changes and is committed to improving its operations.”
The court has also ordered Qantas to contribute to the ACCC’s legal costs in this case.
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