ACCC sues Qantas for selling tickets on cancelled flights
Ronald Mizen and
Ayesha de KretserAug 31, 2023 – 10.10am
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ShareQantas faces tens of millions of dollars in fines over allegations it engaged in false, misleading or deceptive conduct by advertising tickets for more than 8000 flights it had already cancelled.
The Australian Competition and Consumer Commission on Thursday alleged Qantas sold tickets for flights an average two weeks and up to 47 days after they were cancelled between May and July last year, causing chaos for travellers.
Qantas faces tens of millions in fines if it is found to have breached consumer law. Getty Images The ACCC also alleges the airline cancelled 15,000 of 66,000 scheduled flights over the same period. For 10,000 cancellations, it took on average 18 days and up to 48 days to notify ticket holders, the watchdog says.
ACCC chairwoman Gina Cass-Gottlieb said Qantas’ actions “left customers with less time to make alternative arrangements and may have led to them paying higher prices to fly at a particular time”.
The watchdog launched action on the cancellations in the Federal Court. It comes a week after Qantas announced a record $2.5 billion profit for last financial year and amid a firestorm over its failure to refund an estimated $500 million in pandemic-era flight credits.
Just minutes after the ACCC announced the court action, Qantas said it would scrap the arbitrary December 31 expiry date for credits.
Qantas said it would examine the ACCC allegations and respond through the court, but stressed the period under review was “a time of unprecedented upheaval for the entire airline industry.”
“Airlines were experiencing well-publicised issues from a very challenging restart, with ongoing border uncertainty, industry-wide staff shortages and fleet availability causing a lot of disruption,” Qantas said in a statement.
The court action will raise awkward questions for the Albanese government, which labelled Qantas’ record profit “a good news story” and said it blocked Qatar Airways’ bid for 28 more flights a week
to protect Qantas.
Treasurer Jim Chalmers said the allegations were “deeply concerning” but the Albanese government would not make any further comment while the matter was before the court.
Tens of thousands affected
Ms Cass-Gottlieb said Qantas’ actions, which were deliberate and within its control, probably affected the travel plans of tens of thousands of people.
“We allege that Qantas made many of these cancellations for reasons that were within its control, such as network optimisation including in response to shifts in consumer demand, route withdrawals or retention of take-off and landing slots at certain airports,” she said.
“This case does not involve any alleged breach in relation to the actual cancellation of flights, but rather relates to Qantas’ conduct after it had cancelled the flights.
“Cancelled flights can result in significant financial, logistical and emotional impacts for consumers.”
In one example, ticket holders for Qantas flight QF93 from Melbourne to Los Angeles on May 6, 2022, were notified of the cancellation on May 4, two days before the scheduled departure and four days after it was cancelled.
One consumer was provided with a replacement flight a day before their original departure date, which was communicated only by the Qantas app.
As a result, the consumer had to change connecting flights and had a 15-hour layover in Los Angeles, which had a significant impact on the consumer and left them $600 out of pocket.
In another example, Qantas sold 21 tickets for QF73 from Sydney to San Francisco scheduled to depart on July 28, 2022, after it had cancelled the flight, with the last ticket being sold 40 days after cancellation.
The ACCC is seeking orders including penalties, injunctions, declarations, and costs.
The maximum penalty an individual breach of consumer law is the greater of $10 million, three times the total benefits that have been obtained and are reasonably attributable, or 10 per cent of the company’s annual turnover.
A lack of competition among airlines is responsible for more law breaches in aviation than in more competitive industries,
a report from independent economic think tank e61 this week revealed.
“There have been 12 infringement notices and enforceable undertakings issued over 30 years in the airline industry, which is famously dominated by a small number of companies,” the report said