Qantas has agreed to an A$120m ($79m) pay out and fine with the Australian competition authorities after admitting it misled customers by advertising tickets for thousands of flights that had already been cancelled.
The airline will pay around A$20m to the 86,000 customers affected by the cancellations, including those who were not promptly notified of flight cancellations, and has agreed a fine of A$100m for breaching Australian Consumer Law after previously denying the accusations.
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Australian Competition and Consumer Commission (ACCC) Chair Gina Cass-Gottlieb said she was pleased to have secured the Qantas admission, and described the airline’s conduct as “egregious and unacceptable”.
She said: “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.”
The ACCC’s action against Qantas for the cancelled flights was one of a number of issues that surrounded the airline in the second half of 2023, including a high court ruling declaring it had illegally outsourced ground handling working during the Covid-19 pandemic.
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By GlobalDataA Federal judge will have to accept the out-of-court settlement before the matter is closed.
In September 2023, the troubles facing the company led to former CEO Alan Joyce bringing forward his retirement to allow former CFO Vanessa Hudson to step up to the top position, with Hudson apologising to customers soon after her appointment and admitting the airline would need to earn trust back.
Addressing the recent pay out agreements place in that effort, 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.”
Alongside accepting responsibility for the cancellations, Qantas admitted that the conduct had carried on for more than a year longer than originally alleged by the ACCC, with pay outs now expected to cover tens of thousands of flights affecting 86,567 customers between 21 May 2021 and 26 August 2023, just before the ACCC launched its court action.
As a result of the settlement, which will be submitted to the Federal Court for approval, the ACCC has dropped its claims against Qantas on wrongful acceptance of payment, including allegations that the airline had received payment for a service it did not, and did not intend to, provide.
Qantas has also committed to the regulatory authority that it will notify customers of cancelled flights as soon as possible and within, at most, 48 hours of deciding on their cancellation and will stop selling cancelled flights within 24 hours of a decision.
