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The Federal Court has shown Qantas Airways no mercy for selling tickets on flights it had already cancelled, hitting the company with a $100 million penalty for misleading thousands of consumers between 2021 and 2023.
After earlier this year agreeing to pay about $20 million to more than 86,000 ticketholders for cancelling flights on them, Qantas has now been handed a hefty fine in what the Australian Competition and Consumer Commission (ACCC) says is “appropriate to deter Qantas and other businesses from breaching the Australian Consumer Law”.
The $100 million fine was flagged in May when Qantas agreed to a remediation plan for affected passengers, while the ACCC today acknowledged co-operation by Qantas to speedily resolve its court action.
“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,” says ACCC chair Gina Cass-Gottlieb
“We all know the inconvenience of cancelled flights. When this happens, consumers need to know about the cancellation as soon as possible, so they can work out alternative arrangements which suit them.”
The original claim by the ACCC involved about 8,000 flights that were cancelled by Qantas between May 2021 and July 2022 with the airline admitting that it continued to advertise them to customers while knowing these flights were no longer available.
Qantas later admitted that the practice continued a lot longer than originally detailed by the ACCC with the misconduct stretching from 21 May 2021 until 26 August 2023, affecting tens of thousands of flights scheduled to depart between 1 May 2022 and 10 May 2024.
The ACCC had alleged that Qantas had engaged in false, misleading or deceptive conduct as it kept selling tickets on its website for an average of more than two weeks, and in some cases for up to 47 days, after the cancellations.
The ACCC says that Qantas admitted that senior managers knew that some cancelled flights were not immediately removed from sale and that some consumers that booked cancelled flights were not immediately notified.
It says Qantas also admitted that it benefited from the cancellations by securing revenue from customers who may have otherwise chosen a cheaper Qantas flight or a flight with another carrier.
The ACCC launched its legal action against Qantas in August last year, a week after the company reported a $1.7 billion profit for FY23.
The ACCC estimates that up to 880,000 consumers were affected by the misleading Qantas conduct.
“People had made plans, and may have spent money on other related purchases, relying on the fact that the flight would depart as advertised - and the delay in notifying them of the cancellation may have made it more stressful and costly to make alternative arrangements,” says Cass-Gottlieb.
The ACCC secured a commitment from Qantas in May this year that it would pay about $20 million to consumers caught out booking cancelled flights. These were on top of any remedies that Qantas may have offered customers such as such as alternative flights or refunds.
The regulator says consumers who booked a flight two or more days after the flight had been cancelled are eligible to receive payments of $225 for domestic and trans-Tasman flights, and $450 for international flights.
Qantas is understood to have contacted most of the affected consumers largely by email on or before 10 July 2024, but the ACCC notes that consumers have until 6 May 2025 to submit their claim for a payment through the Qantas Customer Remediation Program if they have not accessed the remediation payments.
“The ACCC urges all eligible consumers impacted by this conduct to submit their claims as soon as possible, so they can receive their payment,” says Cass-Gottlieb.
Qantas is required to make all payments to eligible consumers within 60 days of payment information being provided by the consumer and the acceptance of this information.
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