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May, 2024

Qantas to pay $20M to customers over cancelled flights, $100M penalty hangs in the balance

Qantas is due to pay $20 million to more than 86,000 customers after admitting to misleading consumers by advertising tickets for flights it had already decided to cancel. Together with the ACCC, it has also proposed a $100 million penalty for its breach of Australian Consumer Law.

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

The Australian Competition and Consumer Commission (ACCC) launched an action against Qantas in the Federal Court in August, claiming the airline had engaged in false, misleading or deceptive conduct, by advertising tickets for more than 8,000 flights that it had already cancelled but not removed from sale.

Qantas will pay back $20 million to customers impacted by the cancellations, including $225 to domestic ticketholders and $450 to international ticketholders.

An addition $100 million penalty has also been put forward by Qantas and the ACCC, subject to the approval of the Federal Court. Qantas has said it intends to commence the remediation program in advance of the Court approval process.

“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,” said ACCC Chair, Gina Cass-Gottlieb. “Qantas’ 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.”

Hudson said the announcement represented “another important step forward as we work towards restoring confidence in the national carrier”.

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

If approved by The Court, the ACCC expects the penalty to 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,” said Cass-Gottlieb.

Qantas is expected to contact affected consumers to inform them about the payment scheme by 10 July 2024.

“We acknowledge Qantas’ 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,” Cass-Gottlieb concluded.