Australian flag carrier Qantas has reached a $120 million (US $79 million) settlement with federal regulators over allegations the airline continued to sell tickets to customers for more than 8,000 flights that had already been cancelled.
The Australian Competition and Consumer Commission (ACCC) brought the multi-million-dollar lawsuit against Qantas last August, accusing the airline of selling tickets for non-existent flights over a three-month period from May to July 2022
In one case, Qantas allegedly cancelled an international flight from Melbourne to Los Angeles nine days before the scheduled departure but carried out selling tickets for another five days and only told passengers that the flight wasn’t going ahead two days before they were due to show up at the airport.
Qantas not only failed to proactively tell customers that their flights had been cancelled, but the airline didn’t update flight details in the online ‘manage booking’ webpage, meaning that consumers were kept in the dark and left with very little time to make alternative travel arrangements when they did eventually find out their flights had been cancelled.
Lawyers acting on behalf of the airline had tried to convince a court to throw the case out, arguing that airlines can never guarantee that a flight won’t be cancelled or delayed.
In its defence, Qantas had claimed that it kept customers in the dark because it wanted to give its rebooking teams more time to find alternative flights for customers. The airline also said it was scared that telling customers about mass flight cancellations would overwhelm its call centres.
As part of the settlement agreement, Qantas has now pledged $20 million as part of a remediation programme which will pay impacted customers between $225 to $450.
In addition, Qantas has agreed to pay a $100 million civil penalty – subject to the approval of the Federal Court of Australia.
The compensation package will apply to any customer who booked a ticket on a flight two or more days after the service had been earmarked for cancellation. Around 86,000 passengers receive compensation, with domestic and trans-Tasman flight passengers receiving $225 and international passengers receiving $450 in compensation.
The vast majority of affected passengers (around 94%) were booked on domestic and trans-Tasman flights. Qantas maintains, however, that 80% of domestic passengers were offered an alternative flight within 3 hours of the original departure time.
“Today represents another important step forward as we work towards restoring confidence in the national carrier,” commented Qantas CEO Vanessa Hudson on Monday.
The scandal propelled Hudson to the top spot after disgraced former chief executive Alan Joyce decided to step down with immediate effect rather than wait for a later retirement date.
“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards,” Hudson continued. “We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry.”
“The return to travelling was already stressful for many and we did not deliver enough support for customers and did not have the technology and systems in place to support our people.”
Hudson says the airline has since updated its systems and processes to ensure a similar situation can’t occur in the future.
