Need to know
- Qantas admitted in May to misleading consumers and agreed to pay $20 million in compensation to affected customers
- The airline will now pay $100 million in fines after the Federal Court approved a deal between Qantas and the competition regulator
Australia's largest airline has been ordered to pay $100 million in fines for selling tickets to flights it had already decided to cancel and for taking too long to tell ticket holders it wouldn't be running the services.
The Federal Court ruling yesterday comes after Qantas agreed in May to provide $20 million in compensation to tens of thousands of consumers affected by the years-long scandal.
The airline has also admitted senior managers knew axed services weren't immediately being removed from sale, or that customers weren't being promptly updated when flights were cancelled.
Qantas has agreed to change its operating and scheduling systems to prevent further breaches of consumer law.
Penalties to serve as a deterrent
Qantas admits it misled Australians by letting them book flights it was planning to cancel.
The court ordered the $100 million fine after the Australian Competition and Consumer Commission (ACCC) and Qantas jointly submitted that it would be an appropriate deterrent to prevent Qantas and other businesses from breaking the Australian Consumer Law (ACL) in the future.
"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.
The ACCC took Qantas to court in August last year, alleging its sale of the tickets and failure to quickly inform customers once flights had been cancelled had misled consumers and constituted a breach of the 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
In May this year, Qantas admitted it had misled consumers and agreed to compensate them to the tune of $20 million.
Qantas also joined with the ACCC to ask the Federal Court to consider issuing the airline a $100 million fine for breaking the law.
At the time, Qantas CEO Vanessa Hudson apologised, saying the carrier had "let down customers" and adding that it was investing in technology to ensure the same issues don't occur again.
Aviation ombuds scheme to help protect consumers
The admission came after CHOICE spent years calling out Qantas for poor service. In 2022, we gave the airline a Shonky Award for its delays, poor baggage handling and onerous rules for redeeming flight credits.
CHOICE deputy director of campaigns and communications Andy Kelly agrees the $100 million penalty will act as a "strong deterrent".
He adds that the federal government plans to establish a service separate from the airlines that would resolve customer complaints and help improve Australians' experiences with carriers.
"The proposed aviation ombuds scheme will further strengthen and clarify consumer rights when flying and make them easier to enforce," he says.
The Commonwealth is currently consulting on what the scheme will look like: "CHOICE is calling on the government to ensure it's effective, fair, accessible and transparent," Kelly says.
Hundreds of thousands of travellers affected
Qantas agreed earlier this year to compensate tens of thousands of customers.
Since its May admission, Qantas has been communicating with almost 87,000 consumers who are eligible for a slice of the $20 million in compensation.
These are travellers who, between 2021 and 2023, made bookings on the flights the airline had already decided to cancel, or were re-accommodated onto these services after the cancellation of other flights.
They're in line to receive payments of between $225 and $450, depending on whether they had booked or been allocated to a domestic or international flight.
Another 883,000 additional travellers are also believed to have been misled by Qantas not promptly informing them when a flight had been cancelled, but these consumers aren't receiving financial compensation from Qantas under its agreement with the ACCC.
Most of those eligible for money should have already received emails from Qantas and Deloitte and the ACCC is warning consumers to beware of scammers calling and claiming to be able to help them get payments.
The watchdog says to hang up on anyone ringing out of the blue to help you with a payment or refund.
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Stock images: Getty, unless otherwise stated.
