Australian flag carrier Qantas has agreed to a $100 million fine (US$66 million) for misleading customers with its ticket-selling practices during and after the COVID-19 pandemic.
On May 6, the Australian Competition and Consumer Commission (ACCC) announced that it had reached an agreement with Qantas about the penalty resulting from a court action filed by the consumer watchdog in 2023.
Qantas admitted that between May 21, 2021, and Aug. 26, 2023, the airline advertised tickets for tens of thousands of flights that it had already decided to cancel.
It further cancelled thousands of other flights without promptly informing ticketholders.
At the same time, Qantas agreed to compensate over 86,000 affected customers with $20 million cash.
Each domestic customer will receive $250, and international ticketholders will get $450 on top of the remedies they have already received from Qantas, including alternative flights or refunds.
ACCC Chair Gina Cass-Gottlieb said she was pleased the agreement could be reached.
“We expect that this penalty, if accepted by the Court, will send a strong deterrence message to other companies,” Ms Cass-Gottlieb said.
“We note that Qantas has also agreed not to repeat this type of conduct in the future, and to make payments as soon as possible to the thousands of consumers who purchased tickets on flights that Qantas had already decided to cancel or were re-accommodated onto these flights after their original flight was cancelled.”
According to the ACCC, Qantas made changes to its operation so that it could notify customers of cancelled flights with no more than a 24 hour delay.
The changes also apply to Qantas’ low-cost subsidiary, Jetstar.
In August 2023, ACCC filed the lawsuit against Qantas alleging it advertised tickets for more than 8,000 cancelled flights between May 21, 2021, and July 7, 2022.
Qantas’ Response
Following ACCC’s announcement, Qantas CEO Vanessa Hudson said the agreement was another important step toward restoring customers’ confidence in the airline.
“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.”
The CEO also stated that her company had updated its processes and was investing in new technology to prevent similar problems from happening again.
“We thank the ACCC for their cooperation in reaching this outcome, which means we can compensate affected customers much sooner than if the case had continued in the Federal Court. We are focused on making the remediation process as quick and seamless as possible for customers,” Ms. Hudson said.
Qantas will reach out to affected consumers via email in June to inform them about how they can lodge a claim.
Meanwhile, professional services firm Deloitte Australia will administer the payments on behalf of Qantas via a dedicated online portal.
The ACCC also warned that scammers could take advantage of Qantas’ compensation scheme to call people and falsely claim they could help people get payments.
The consumer watchdog urged people to hang up on those calls and not give personal information, including access to their computer or bank account.
