The Australian Competition and Consumer Commission (ACCC) is pushing for a record $250 million fine against Qantas for allegedly selling tickets for flights that had already been cancelled.
The ACCC filed a lawsuit in the Federal Court on Thursday, alleging that Qantas engaged in false, misleading or deceptive conduct by continuing to sell tickets for 8,000 flights that had been cancelled up to 47 days before.
This legal showdown is sending shockwaves through the aviation industry and the business world at large. In this comprehensive article, we will delve into the details of the case and explore its potential implications.
The ACCC’s Allegations
The Australian consumer watchdog has set its sights on a record $250 million fine against the national flag carrier Qantas, alleging the airline’s involvement in a deceptive and misleading ticket sales saga.
“The ACCC has conducted a detailed investigation into Qantas’ flight cancellation practices. As a result, we have commenced these proceedings alleging that Qantas continued selling tickets for thousands of cancelled flights, likely affecting the travel plans of tens of thousands of people,” ACCC Chair Gina Cass-Gottlieb said.
“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.”
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The ACCC filed a lawsuit in the Federal Court, asserting that Qantas engaged in false and misleading conduct. The basis of the claim is that the national carrier allegedly continued to advertise and sell tickets for more than 8,000 flights which it had already cancelled in its system.
This is alleged to have occurred in the period between May and July 2022. The broad assertions are as follows:
Inadequate Disclosure
The ACCC contends that Qantas failed to adequately inform customers that the flights they were booking had already been cancelled. This lack of transparency potentially left passengers unaware of the situation, leading them to believe they were making legitimate reservations.
Sales Despite Cancellations
Qantas is accused of continuing to sell tickets for flights that it knew would not take place. This meant that passengers were purchasing tickets for flights that were essentially non-existent, causing financial loss and severe inconvenience.
The ACCC reportedly received 1,300 complaints regarding Qantas’ actions with regards to the ticket sales, and this was the catalyst for the subsequent investigation by the Australian consumer body.
The Potential Consequences
If the ACCC successfully proves its case, Qantas could face substantial fines. Under the Australian Consumer Law, the airline could be fined up to $10 million, for each breach.
With allegations spanning thousands of flights, this could result in a staggering fine of up to $800 million.
Currently the highest penalty which has been enforced for a breach of Australian consumer law is $125 million, which was issued to car manufacturer Volkswagen in 2019, for misleading customers on diesel engine emissions.
Qantas Response
In response to the ACCC’s allegations, Qantas has vehemently denied any wrongdoing. The airline has declared its intent to vigorously defend itself in court. The legal battle is scheduled to unfold in early 2024, and all eyes will be on the outcome.
The news of the proposed Federal Court action by the ACCC comes after a week which has seen the national flag carrier firmly in the spotlight.
Earlier this week, Group CEO Alan Joyce and other officers faced a raft of questions with regards to a series of matters at an Australian Senate inquiry into the cost of living.
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