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🗞️Qantas Faces $100 Million Penalty for Misleading Consumers

🗞️Qantas Faces $100 Million Penalty for Misleading Consumers

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Qantas has admitted that it misled consumers by advertising tickets for tens of thousands of flights it had already decided to cancel, and by cancelling thousands more without promptly informing ticket holders of its decision, following court action by the ACCC.

Under an agreement announced today, the ACCC and Qantas will ask the Federal Court to impose a $100 million penalty on Qantas for breaching the Australian Consumer Law.

Qantas has also agreed in a court-enforceable undertaking to pay approximately $20 million to more than 86,000 customers who were sold tickets for flights that Qantas had already decided to cancel, or in some cases who were rebooked on those flights after their original flights were cancelled.

Qantas will pay $225 to domestic ticket holders and $450 to international ticket holders. These payments are on top of any other remedies these customers got from Qantas, like alternative flights or refunds.

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“We are pleased to have secured these admissions by Qantas that it misled its customers, and its agreement that a very significant penalty is required as a result of this conduct. The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law,” ACCC Chair Gina Cass-Gottlieb said.

“Qantas’ conduct was egregious and unacceptable. Many consumers will have made holiday, business and travel plans after booking on a phantom flight that had been cancelled.”

“We expect that this penalty, if accepted by the Court, will send a strong deterrence message to other companies. Importantly, it demonstrates that we take action to ensure that companies operating in Australia communicate clearly, accurately and honestly with their customers at all times,” Ms Cass-Gottlieb said.

“We note that Qantas has also agreed not to repeat this type of conduct in the future, and to make payments as soon as possible to the thousands of consumers who purchased tickets on flights that Qantas had already decided to cancel, or were re-accommodated onto these flights after their original flight was cancelled.”

The ACCC launched Federal Court action against Qantas in August 2023 alleging that, between 21 May 2021 and 7 July 2022, Qantas advertised tickets for more than 8,000 cancelled flights. It was also alleged that, for more than 10,000 flights scheduled to depart in May to July 2022, Qantas did not promptly notify existing ticketholders that their flights had been cancelled.

Qantas has now admitted that its misconduct continued from 21 May 2021 until 26 August 2023, affecting tens of thousands of flights scheduled to depart between 1 May 2022 and 10 May 2024.

“We acknowledge Qantas’ cooperation in ultimately deciding not to contest this case, admitting that the conduct occurred for a longer period, and seeking to resolve this early and for the benefit of consumers,” Ms Cass-Gottlieb said.

Qantas has also undertaken to notify customers of cancelled flights as soon as practicable, and no more than 48 hours from deciding to cancel the flight. It has also undertaken to stop selling cancelled flights as soon as practicable, and in any event within 24 hours of its decision to cancel. The undertaking also applies to its low-cost subsidiary, Jetstar.

Qantas will also review its consumer compliance program and appoint independent auditors who will monitor Qantas’ compliance with the undertaking and provide reports to the Qantas board and the ACCC.

The ACCC and Qantas will shortly seek approval of the proposed penalty by the Federal Court. However, Qantas intends to commence the remediation program in advance of the Court approval process.

Qantas Group CEO Vanessa Hudson said: “Today represents another important step forward as we work towards restoring confidence in the national carrier.

“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards. We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry. The return to travelling was already stressful for many and we did not deliver enough support for customers and did not have the technology and systems in place to support our people.

“We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again.

“We thank the ACCC for their cooperation in reaching this outcome, which means we can compensate affected customers much sooner than if the case had continued in the Federal Court. We are focused on making the remediation process as quick and seamless as possible for customers.”

The ACCC’s case related to flight cancellation practices following the restart of operations post-COVID, which has been extended through to the end of August 2023, when steps were taken to ensure that processing of cancellation decisions occurred promptly.

Meanwhile. The TWU has welcomed the $120 million settlement as good news for Qantas passengers, but says it is another reminder for illegally sacked Qantas workers that they’re at the bottom of the pile for the airline to which they were loyal for decades.

TWU National Secretary Michael Kaine said: “This is good news for passengers misled by the appalling conduct of Qantas. Customers have suffered multiple times from being ripped off, dealing with flight cancellations, delays and lost baggage and even being blamed for airport chaos by Alan Joyce.”

“Spare a thought for the 1700 Qantas families who weren’t just misled, but were illegally sacked, and are still waiting for justice more than three years later. Qantas dragged them through costly, unsuccessful appeals taking every legal point in the book through an army of expensive silks. In December, Qantas walked away from mediation to reach a settlement for the unlawfully axed workers. It’s another stark reminder of Joyce-led Qantas’ disdain for its own workforce,” He said .

Kaine said Justice delayed is justice denied. Illegally sacked workers need closure and compensation for some of the hardest years of their lives. Family breakdowns, houses lost, mental and physical health suffering. Qantas has a lot to answer for, and it must pay.

“The last few years have shone a spotlight on the awful, immoral business model at Qantas and the dire consequences for passengers, workers and taxpayers from an absence of regulation,” He disclosed.

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🗞️Qantas Faces $100 Million Penalty for Misleading Consumers

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