6 May 2024

Qantas agrees to $120m settlement after ACCC action over misleading customers

| James Day
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parked Qantas planes

Qantas says it has updated its processes and is investing in new technology to ensure the practices that led to the $120m settlement are not repeated. Photo: File.

Qantas has agreed to a $120 million settlement after the ACCC brought legal action against the airline group for misleading its customers following the COVID-19 shutdown.

As part of an agreement announced today, Qantas has admitted that it misled consumers by advertising tickets for tens of thousands of flights it had already decided to cancel, and by cancelling thousands more flights without promptly telling ticket-holders of its decision.

The ACCC and Qantas will ask the Federal Court to impose a penalty of $100 million on the airline group for breaching the Australian Consumer Law. Qantas has also agreed in a court-enforceable undertaking to pay about $20 million to 86,597 customers who were affected by its misconduct from 21 May, 2021, until 26 August, 2023.

Domestic and international ticket-holders will be paid $225 and $450, respectively, by Qantas – on top of any remedies already received, such as alternative flights or refunds.

ACCC chair Gina Cass-Gottlieb said the regulator was pleased to have secured these admissions and its sizeable agreement with Qantas, which she believes is an important milestone in enforcing the Australian Consumer Law.

“Qantas’ conduct was egregious and unacceptable,” Ms Cass-Gottlieb said. “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.”

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The ACCC launched Federal Court action against Qantas in August 2023 alleging that, between 21 May, 2021, and 7 July, 2022, the airline group advertised tickets for more than 8000 cancelled flights. It was also alleged that, for more than 10,000 flights scheduled to depart from May to July 2022, Qantas did not promptly notify existing ticket-holders that their flights had been cancelled.

Qantas decided not to contest the case and went on to admit that its misconduct continued from 21 May, 2021, until 26 August, 2023, affecting tens of thousands of flights scheduled to depart between 1 May, 2022, and 10 May, 2024.

The ACCC chair acknowledged Qantas’s cooperation in doing this, along with seeking to resolve the matter early and for the benefit of its consumers.

Qantas Group CEO Vanessa Hudson said today represented another important step forward as the airline worked towards restoring confidence in the national carrier.

“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards,” Ms Hudson said. “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.

“We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again.”

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Through the court-enforceable undertaking – which also applies to its subsidiary Jetstar – Qantas said it would notify customers of cancelled flights as soon as practicable, and no more than 48 hours from deciding to cancel. It has also undertaken to stop selling cancelled flights as soon as practicable, and in any event within 24 hours of its decision to cancel.

Of the customers affected, 94 per cent were flying domestically and the rest internationally.

Qantas said more than 80 per cent of passengers on domestic services were offered an alternative flight departing before or within three hours of the scheduled time. More than 60 per cent of passengers on international services were offered an alternative flight departing before or within 12 hours of the scheduled departure time.

Affected customers will be able to access their payments through a dedicated online portal facilitated by professional services firm Deloitte, which will be independently audited. From next month, these customers will be notified by email with details on how they can lodge a claim.

Original Article published by James Day on PS News.

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