Qantas will pay a $100 million fine and reimburse flyers around $20 million after admitting to deceiving customers by advertising tickets for thousands of flights it had already planned to cancel.
After legal action by the Australian Competition and Consumer Commission (ACCC), Qantas will pay the civil penalty of $100 million for breaching Australian Consumer Law, pending approval from the Federal Court of Australia.
Additionally, the airline will compensate over 86,000 customers approximately $20 million. These customers were either sold tickets for flights that Qantas had already decided to cancel or were shifted to these flights after their original ones were cancelled. Domestic travellers can expect $225, while international passengers will receive $450.
These payments come on top of any other compensation these customers may have already received from the carrier, such as refunds or alternative flights.
ACCC Chair Gina Cass-Gottlieb said, “the size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law”.
“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,” she remarked.
“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.
“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.”
When it launched legal action against the airline in August 2023, the ACCC alleged that between 21 May 2021 and 7 July 2022 the carrier advertised over 8,000 flights that were later cancelled.
It also claimed the airline didn’t promptly inform ticket-holders of cancellations for over 10,000 flights between May and July 2022.
Qantas changes
As part of the settlement, Qantas agreed to notify customers of axed flights within 48 hours of deciding to cancel them and to stop selling cancelled flights within 24 hours of a decision. This agreement also extends to its subsidiary, Jetstar.
The airline will review its consumer compliance program, appoint independent auditors to monitor its compliance and report to the Qantas board and the ACCC.
“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.
Federal Court will decide the penalty during a hearing on a yet-to-be-determined date.
The Australian carrier says it plans to start the remediation payments to customers before the Court approval process.
“Restoring confidence”
Qantas Group CEO Vanessa Hudson said the announcement marked “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,” she added.
“We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry.
“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 has dropped its claims against Qantas regarding accepting payment without providing a service. Affected customers were offered refunds or alternative flights.
Qantas will notify customers via email from next month with details about how they can lodge a claim. Further information can be found at www.qantasremediation.deloitte.com.au.
Meanwhile, the Transport Workers Union (TWU) says the agreement is good news for passengers.
“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,” TWU National Secretary Michael Kaine said.
In February, in its first report card under the leadership of Hudson, the Qantas Group reported a $1.25 billion underlying profit before tax (PBT) for the first half of FY24.
