Qantas Airways could be facing significant penalties after the Australian Competition and Consumer Commission (ACCC) launched court action against the airline for allegedly advertising tickets for thousands of flights that had already been cancelled between May and July 2022.
The ACCC has claimed that Qantas continued to sell tickets on its website for 8,000 flights for an average of two weeks after they had been cancelled, as well as not immediately informing customers on more than 10,000 flights that their flights had been cancelled.
ACCC chair Gina Cass-Gottlieb said that the commission had conducted a detailed investigation before launching the court proceedings: “We allege that Qantas’ conduct in continuing to sell tickets to cancelled flights and not updating ticketholders about cancelled flights left customers with less time to make alternative arrangements and may have led to them paying higher prices to fly at a particular time not knowing that flight had already been cancelled.”
Investigations by the ACCC also alleged that, in some cases, tickets continued to be sold for flights for up to 47 days after they had been cancelled and that some passengers were unaware of their flights’ cancellation for up to 48 days.
The commission is seeking an order, including penalties, injunctions, declarations and costs, as a result of the court action, which it said covers 70% of the airline’s cancelled flights for the three-month period highlighted.
The Australian Consumer Law states that the maximum penalties for each breach of the law before November 9 2022 are greater than A$10m ($6.5m) or three times the total benefits that have been obtained and are reasonably attributable.
However, if the total value of the benefits cannot be determined, a court is able to order penalties amounting to 10% of the company’s annual turnover. Qantas reported an annual revenue and other income of A$19.8bn ($12.8bn) for FY23.
In response to the court action, Qantas said that it understood the concerns that customers would have around the allegations by the ACCC and was continuing to review them, but apologised that its service standards “fell well short” as the airline “struggled to restart post-Covid”, while adding that it had worked hard to fix its standards since.
A statement added: “Some commentary has suggested that Qantas was engaged in charging a ‘fee for no service’ due to cancelled flights over this period. Our longstanding practice is that when a flight is cancelled, customers are offered an alternative flight as close as possible to their original departure time or a refund.”
Though not claiming any misconduct in relation to the reasoning behind the cancellations highlighted, Cass-Gottlieb did state that the ACCC believed that many of the flights were cancelled for reasons under the company’s control.
Cass-Gottlieb said: “We allege that Qantas made many of these cancellations for reasons that were within its control, such as network optimisation, including in response to shifts in consumer demand, route withdrawals, or retention of take-off and landing slots at certain airports.”
Further complicating matters for Qantas, the ACCC also stated that it strongly objected to a suggestion by the airline that over A$400m in “Covid credits”, received by customers after their flights were cancelled during the pandemic, would expire at the end of 2023.
However, the airline released a statement soon after the ACCC announced that the credits would no longer have an expiry date and could be redeemed as a refund after the end of the year for Qantas flights or be used towards a new booking for Jetstar flights.
The week of controversy follows two more positive announcements for the airline after it announced plans to expand its international offerings beyond pre-pandemic levels in 2024 and also revealed an order for 12 787 Dreamliner aircraft from Boeing.