Qantas fined AU$100 million for misleading customers

Qantas has been ordered by the Federal Court to pay AU$100 million in penalties for misleading consumers. The penalties relate to the airline offering and selling tickets for flights it had already decided to cancel, as well as failing to promptly inform existing ticket holders of its decision. This ruling follows a case brought by the Australian Competition and Consumer Commission (ACCC).

These penalties were imposed after Qantas admitted to contravening the Australian Consumer Law (ACL) and agreed to joint submissions with the ACCC to the Court. The AU$100 million penalties aim to deter Qantas and other businesses from breaching the ACL in the future, while also recognising Qantas’ cooperation in resolving the proceedings at an early stage.

“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,” ACCC Chair Gina Cass-Gottlieb stated.

Additionally, on May 5, 2024, Qantas undertook to pay approximately AU$20 million to consumers who purchased tickets for flights that Qantas had already decided to cancel or, in some instances, to those who were re-accommodated on different flights after their original bookings were cancelled. These payments are in addition to any other remedies consumers have already received, such as alternative flights or refunds. Consumers are encouraged to follow the outlined steps to check their eligibility for these payments.

“We all know the inconvenience of cancelled flights. When this happens, consumers need to be informed of the cancellation as soon as possible, so they can make alternative arrangements that best suit their needs,” Cass-Gottlieb said.

“Up to around 880,000 consumers were affected by Qantas’ conduct. People made plans and may have spent money on related purchases, relying on the assumption that their flights would depart as advertised. The delay in notifying them of the cancellations may have made it more stressful and costly for them to organise alternative arrangements,” Cass-Gottlieb added.

Qantas admitted that its senior managers, responsible for various aspects of the airline’s systems and operations, were aware that cancelled flights were not immediately removed from sale. Some consumers unknowingly booked tickets for flights that had already been cancelled, while existing ticket holders were not promptly informed. The airline’s ‘Manage Booking’ pages were also not updated in a timely manner when flights were cancelled.

Qantas admitted to benefiting from this conduct by obtaining revenue from consumers who may have opted for a cheaper Qantas flight or chosen a flight with another carrier if they had known their original flight had been cancelled. Additionally, by delaying improvements to its systems, Qantas saved costs it would have otherwise incurred at an earlier stage.