Australia’s national carrier, Qantas, has admitted to misleading customers by selling tickets for flights it had already decided to cancel.
This admission comes after legal action by the Australian Competition and Consumer Commission (ACCC). It relates to allegations by the consumer watchdog that the airline advertised tickets for sale on flights known to be cancelled.
As part of an agreement announced today, the ACCC and Qantas will ask the Federal Court to impose a penalty of $100 million on Qantas for breaching the Australian Consumer Law.
Qantas has agreed to a significant compensation package for affected passengers and pledged to improve communication practices to prevent future misleading conduct.
Heavy Penalty and Consumer Compensation
The ACCC accused Qantas of advertising tickets for over 8,000 flights between May 2021 and July 2022 that were already cancelled.
In a recent turn, Qantas has acknowledged that this misconduct continued for an extended period. It essentially impacted tens of thousands of flights scheduled for departure between May 2022 and May 2024.
To address this widespread issue, the airline will face a proposed penalty of $100 million for breaching Australian Consumer Law.
More importantly for affected passengers, Qantas has agreed to a compensation scheme valued at approximately $20 million.
Qantas is compensating over 86,000 consumers who booked or were rebooked onto flights the airline had already cancelled. Domestic passengers can expect $225 each, while international passengers will receive $450.
Summary of the Agreement
Under the agreement with the ACCC, Qantas:
- admits to misleading consumers in respect of flights it had decided to cancel.
- undertakes to the ACCC to make payments to customers.
- undertakes to not engage in this type of conduct in the future.
- will make joint submissions on the proposed $100 million penalty to the Federal Court.
The court will decide the size of the penalty at a future hearing. Qantas has also agreed to pay a contribution towards the ACCC’s costs.
Improved Communication and Transparency
Beyond the financial penalty and compensation, the agreement between the ACCC and Qantas outlines crucial reforms aimed at preventing similar misleading practices in the future.
Qantas has committed to significantly improving communication with passengers regarding flight cancellations.
This includes notifying customers within 48 hours of a flight cancellation decision and immediately removing cancelled flights from their sales channels. Importantly, these reforms also apply to Qantas’ budget subsidiary, Jetstar.
To ensure compliance with these reforms, Qantas will undergo an independent audit. This audit will monitor the airline’s practices and report its findings to both the Qantas board and the ACCC.
This oversight mechanism provides additional assurance for consumers that Qantas is serious about improving communication and transparency.
Claiming Compensation
The airline will be proactively reaching out to customers impacted by its misleading practices by July 10th, 2024. This communication will likely be via email and text message, directing individuals to a secure online portal to claim compensation.
As with any compensation program, there’s a risk of potential scams. Consumers should be extra cautious and only provide personal information through the official claims portal designated by Qantas.
Summary
“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.”
“The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law,” ACCC Chair Gina Cass-Gottlieb said.
This agreement signifies a significant step forward for consumer protection in the Australian airline industry. The hefty penalty and compensation package serve as a strong message to Qantas and other airlines about the importance of transparent and ethical business practices.
Passengers can expect improved communication and a more reliable ticketing system from Qantas going forward.
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