Business
11 October, 2024
Airline fined for fakes
THE Federal Court has ordered Australia’s largest airline to pay $100 million in penalties after it admitted to misleading travellers by selling tickets for flights it had already decided to cancel in May of this year.
The airline also agreed to pay a further $20 million in addition to refunds or alternative arrangements, to affected consumers who have until May 6th, 2025 to submit claims.
The Australian Competition and Consumer Commission (ACCC), which took the court action, said in a statement on Wednesday that Qantas breached Australian Consumer Law by “engaging in deceptive conduct and making false or misleading representations regarding more than 82,000 flights scheduled between May 2022 and May 2024”.
ACCC Chair Gina Cass-Gottlieb highlighted the significant impact of Qantas’ actions, which affected up to 880,000 people, “causing undue stress for customers and preventing timely rebooking”.
“Qantas admitted that senior management knew cancelled flights were not being promptly removed from sale and that customers continued booking tickets on flights that were no longer operating,” she said.
The airline also acknowledged that ticketholders weren’t immediately notified of cancellations, and flight details remained available in the ‘Manage Booking’ system for days after the cancellations, misleading customers.
“By continuing to sell tickets for cancelled flights and delaying notifications, Qantas generated revenue from consumers who may have otherwise opted for cheaper or alternative airlines. Additionally, the delay in addressing the system issues allowed Qantas to avoid the associated costs of an earlier resolution.”
On average, tickets for cancelled flights remained on sale for 11 days, with some instances extending up to 62 days after the cancellation decision.
Qantas has undertaken to pay affected consumers through a court-enforceable consumer remediation program.
Most eligible passengers were contacted by 10 July 2024 and can submit their claims through a secure online portal hosted by Deloitte. Payments will be made within 60 days of submission and acceptance of payment information.
If the total amount paid to consumers does not reach $20 million by the end of the remediation period, the remaining balance will be donated to a charity approved by the ACCC.
“A large, well-resourced company like Qantas should have had robust systems in place to prevent these issues,” Ms. Cass-Gottlieb stated. “However, we are pleased that Qantas has since made changes and is committed to improving its operations.”
The court has also ordered Qantas to contribute to the ACCC’s legal costs in this case.
