The Australian Competition and Consumer Commission (ACCC) has announced Qantas has agreed to $20 million in payments to customers and, subject to court approval, a $100 million penalty for misleading consumers.
The massive fines are a result of allegations Qantas sold thousands of tickets on already-cancelled flights in 2022.
The $20 million deal means Qantas will pay $225 to domestic ticket holders and $450 to overseas ticket holders for an estimated 86,000 affected passengers.
These payments are on top of any remedies or refunds the consumers have already received from Qantas such as alternative flights or refunds.
The $100 million will be a civil penalty, paid to the federal government.
Consumer milestone
ACCC chair Gina Cass-Gottlieb said the penalties were a milestone of consumer law.
“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,” she said.
“The size of this proposed penalty is an important milestone in enforcing the Australian consumer law.
“Qantas’s conduct was egregious and unacceptable. 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.
Public confidence
Beleaguered Qantas chief executive Vanessa Hudson said it was another step forward for the company to restore public confidence.
“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards,” said Ms Hudson.
“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.”
In its defence during negotiations, Qantas argued it was not selling flights, but ‘bundles of rights’ which drew public outrage.
“The service Qantas relevantly offers is a bundle of contractual rights, which are consistent with Qantas’s promise to do its best to get consumers where they want to be on time,” the defence said.
“That bundle of rights includes alternative options to which consumers become entitled in respect of cancelled flights but does not include any promise to provide a ‘particular flight’ or to operate to a particular schedule.”
Court action
The ACCC launched Federal Court action against Qantas in August 2023, alleging that, between 21 May 2021 and 7 July 2022, Qantas advertised tickets for more than 8000 cancelled flights.
It was also alleged that, for more than 10,000 flights scheduled to depart in May to July 2022, Qantas did not promptly notify existing ticketholders that their flights had been cancelled.
Qantas admitted that its misconduct continued from 21 May 2021 until 26 August 2023, affecting tens of thousands of flights scheduled between 1 May 2022 and 10 May 2024.
“We acknowledge Qantas’s cooperation in ultimately deciding not to contest this case, admitting that the conduct occurred for a longer period, and seeking to resolve this early and for the benefit of consumers,” Ms Cass-Gottlieb said.
As well as the payments to customers and fines, Qantas has also agreed to notify customers of cancelled flights as soon as practicable and no more than 48 hours from deciding to cancel the flight.
It has also undertaken to stop selling cancelled flights as soon as possible, or within 24 hours of the decision to cancel. The undertaking also covers Jetstar.
How you will get paid
Qantas will contact affected customers to inform them of the payment scheme by 10 July 2024. Affected customers will receive communication from Qantas and Deloitte Australia, which is administering the payments on behalf of Qantas, via email or text message, providing information on accessing a portal to facilitate the payment.
The ACCC has already issued a warning that consumers should be aware of scammers pretending to make contact on behalf of Qantas or Delloite. Consumers should only provide their personal information through the official claims portal, and not to anyone else.
The ACCC says if you receive a call from anyone offering to help with a payment, hang up immediately.
They also recommend to never give personal information to anyone calling you out of the blue, never give access to your computer or bank account and never click on a link in a text message or open an attachment in an email if you were not expecting the text or email. If you have given information to a scammer or lost money, contact your bank immediately.
Do you think these penalties go far enough? Why not share your opinion of Qantas in the comments section below?
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