Qantas has acknowledged that it misled customers by promoting tens of thousands of airfares for flights that had already been cancelled last year, and it has agreed to pay A$100 million (NZ$110 million) in fines to the consumer watchdog.
The largest airline in the nation is also getting ready to pay an additional A$20 million (NZ$22 million) to 86,000 consumers who were sold tickets under its settlement agreement with the Australian Competition and Consumer Commission. The ratification of this agreement by the Federal Court is still pending.
In August of last year, the ACCC filed a lawsuit against Qantas, claiming that the company had promoted and sold tickets for 8,000 flights that had already been canceled during a two-month period in 2022.
The consumer watchdog withdrew its accusations against the airline for improperly accepting payment for these flights, but Qantas acknowledged that it was incorrect to advertise the flights while refusing to accept costs for non-service. Vanessa Hudson, the CEO of Qantas, who took over the position two months ahead of schedule due to the repercussions from the claims, stated that the settlement agreement was a critical step in rebuilding consumer trust in the airline.
“After the Covid-19 shutdown, we acknowledge that Qantas disappointed customers and did not live up to our own expectations when flights resumed.” We are deeply sorry for any inconvenience that our tardiness in sending cancellation notices to numerous consumers may have caused.
“We did not provide enough support for customers and did not have the technology and systems in place to support our people,” Hudson said. “The return to travel was already stressful for many.”
94% of the affected passengers, according to Qantas, were either domestically or over the Tasman, with the remaining 6% traveling abroad. Additionally, it stated that on domestic flights, over 80% of customers were given the option to switch to a different aircraft that would leave early or within three hours of their original scheduled departure time. Additionally, it stated that flights that left earlier or within 12 hours of the initially booked trip were supplied to more than 60% of the international customers.
The acknowledgement by ACCC head Gina Cass Gotlieb that Qantas misled its customers marks a significant turning point in the enforcement of the Australian Consumer Law.
“Qantas’ conduct was egregious and unacceptable. Many customers 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,” Cass-Gotlieb said.
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