Federal Court orders Qantas to pay $100m for misleading customers
Qantas has been ordered to pay $100 million in penalties by the Federal Court.
On Tuesday afternoon, the Australian Competition and Consumer Commission (ACCC) confirmed the penalty, saying the Australian airline was hit with the fee for “misleading consumers by offering and selling tickets for flights it had already decided to cancel, and by failing to promptly tell existing ticketholders of its decision”.
The penalties were imposed after Qantas admitted to contravening the Australian Consumer Law (ACL).
“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, said.
In May, Qantas “admitted that it misled consumers” by advertising flights set to be cancelled, and sold 86,000 tickets to cancelled flights. It then agreed to a court-enforceable undertaking to pay about $20 million to customers sold tickets on flights the airline had already decided to cancel.
And less than two weeks ago, it was revealed that management was aware that tickets were being sold for the cancelled flights, with CEO Vanessa Hudson agreeing to settle the ACCC claim earlier in the year.
In doing so, the airline admitted 86,597 customers were sold cancelled flights, totalling $170.9 million, with an average of 11 days between the sale of the flights and the airline notifying the traveller the flights had been cancelled.
“We all know the inconvenience of cancelled flights,” Cass-Gottlieb said.
“When this happens, consumers need to know about the cancellation as soon as possible, so they can work out alternative arrangements which suit them.”
“Up to about 880,000 consumers were affected by 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.”
Mumbrella has contacted Qantas for comment.
Keep up to date with the latest in media and marketing
Got a tip?
Neil Griffiths is the Managing Editor of Mumbrella. He joined the company in October 2023.
Linkedin
Have your say