Qantas has been ordered by Australia’s Federal Court to pay A$100 million (US$67.3m) in penalties for misleading consumers by offering and selling tickets for flights it had already decided to cancel.
“This is a substantial penalty, which sets a strong signal to all businesses, big or small, that they will face serious consequences if they mislead their customers,” said Gina Cass-Gottlieb, chair of Australia’s consumer watchdog, the ACCC.
In addition to these penalties, Qantas gave an undertaking to the ACCC that it would pay about A$20 million to consumers who purchased tickets on flights that Qantas had already decided to cancel.
The watchdog said on flights scheduled to depart between May 2022 and May 2024 up to about 880,000 consumers on 70,543 flights (69,237 domestic and trans-Tasman flights, and 1,306 international flights) were affected by Qantas’ conduct.
On average, tickets for these cancelled flights were offered for sale for about 11 days after cancellation, and in some cases, for up to 62 days after cancellation.
Qantas admitted that senior managers responsible for different aspects of Qantas’ systems and operations between them knew that cancelled flights were not immediately removed from sale; that some consumers booked tickets for flights that had already been cancelled; that existing ticketholders were not immediately notified; and that the ‘Manage Booking’ pages were not promptly updated when flights were cancelled.
After the start of ACCC proceedings, Qantas made changes to its operating and scheduling systems.