Qantas Airways has agreed to pay 120 million Australian dollars ($79 million) in compensation and fines for selling tickets on thousands of cancelled flights, following a lawsuit filed by Australia’s consumer watchdog. The Australian Competition and Consumer Commission alleged that Qantas engaged in false advertising by selling tickets for over 8,000 flights that had already been cancelled between May 2021 and July 2022. Qantas has agreed to settle the suit by paying a AU$100 million ($66 million) fine to the Australian government and a projected AU$20 million ($13 million) to more than 86,000 affected customers.
Qantas CEO Vanessa Hudson acknowledged the airline’s failure to notify customers of flight cancellations in a timely manner, stating that the company fell short of its own standards when flight operations resumed after the COVID shutdown. She expressed sincere apologies to the affected customers and emphasized the importance of restoring confidence in the national carrier. The settlement is seen as a step forward in addressing the issue and making amends for the inconvenience caused to passengers who were misled by Qantas’ advertising practices.
The settlement agreement is pending approval from a Federal Court judge, with Qantas admitting to its misconduct that continued until August last year, longer than initially alleged by the regulator. The ACCC chair, Gina Cass-Gottlieb, welcomed the admissions by Qantas and emphasized the significance of the penalty in holding the airline accountable for its conduct. She described Qantas’ actions as egregious and unacceptable, particularly noting the impact on consumers who made travel plans based on false flight information.
Despite the legal battle and the financial penalties, Qantas had reported a record profit for the fiscal year ending June 30, 2023, after suffering losses during the pandemic. The underlying profit before tax for 2022/23 was AU$2.47 billion ($1.6 billion), compared to a loss of AU$1.86 billion ($1.2 billion) in the previous year. The airline’s after-tax profit for the latest year was reported at AU$1.74 billion ($1.13 billion), indicating a significant recovery in its financial performance despite the regulatory challenges and compensation payments resulting from the lawsuit.
The settlement with the ACCC includes additional measures by Qantas to compensate affected customers, such as payments of AU$225 ($149) for domestic ticket holders and AU$450 ($298) for international bookings. These payments are in addition to other remedies provided by Qantas, including alternative flights and refunds. The airline’s commitment to addressing the issue and making restitution to affected passengers reflects a willingness to rectify the situation and rebuild trust with its customer base.
The regulator’s decision to take legal action against Qantas and secure admissions of misleading conduct highlights the importance of consumer protection and holding companies accountable for their advertising practices. By acknowledging its failures and agreeing to compensate affected customers, Qantas is taking steps towards accountability and transparency in its operations. The outcome of the settlement and the airline’s efforts to rectify the situation will be closely monitored by both regulators and consumers to ensure that such incidents are not repeated in the future.
