Australia regulator sues Qantas for ‘deceptive conduct’ of selling tickets for thousands of cancelled flights

The Australian Competition and Consumer Commission (ACCC) said in a court filing that the carrier broke consumer law when it sold tickets to more than 8,000 flights between May and July 2022 without disclosing they had been cancelled.

The airline kept selling tickets for an average of 16 days after it had cancelled flights for reasons often within its control, such as “network optimisation”, the ACCC added.

Qantas “engaged in false, misleading or deceptive conduct,” the ACCC said. The airline took payments for tickets on flights that it knew, or should have known, were already cancelled, it said.

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Explainer: Why are airfares so expensive and when will they get cheaper?

Explainer: Why are airfares so expensive and when will they get cheaper?

Qantas kept selling tickets to one Sydney-to-San Francisco flight 40 days after it had been cancelled, the regulator said.

The competition regulator already draws more complaints about Qantas than any other business in Australia.

The maximum penalty Qantas faces is 10 per cent of annual turnover, which was A$19.8 billion ($12.8 billion) in the year to June, although the ACCC did not specify an amount.

Qantas said it would review the ACCC’s allegations and respond in court. It noted that the period examined by ACCC was a time of “unprecedented upheaval for entire airline industry”.

The ACCC lawsuit “could be detrimental for the Qantas brand, which has had a bit of a tough patch lately in any case,” said Rico Merkert, deputy director of Sydney University’s Institute of Transport and Logistics Studies.

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After Australia reopened its borders in late 2021, Qantas bore the brunt of complaints about flight cancellations, lost luggage and long airport lines as transport operators around the world struggled to find staff.

At an Australian Senate hearing this week, Qantas CEO Alan Joyce, who will retire in November after 15 years, confirmed the airline had nearly A$500 million in unused credits for cancelled flights that would expire in December.

After the ACCC lawsuit was filed on Thursday, Qantas said it was scrapping the 2023 deadline, with Joyce saying in a video message that “we know the credit system was not as smooth as it should have been and … people lost faith in the process”.

At the Senate hearing, Joyce confirmed Qantas had written to the federal government in 2022 asking it to deny a request from Qatar Airways, a Qantas competitor on international routes, to increase flights to Australia. The government denied the extra Qatar flights.

“Reliable air travel is essential for many consumers in Australia who are seeking to visit loved ones, take holidays, grow their businesses or connect with colleagues,” said ACCC Chair Gina Cass-Gottlieb in a statement.

Egg Attack

For much of 2022, Qantas struggled to cope with a sudden rebound in demand as Covid-19 travel restrictions eased. With the airline short of staff and planes, cancellation rates soared. Passenger rage reached its peak in July last year, when the Sydney home of under-fire Chief Executive Officer Alan Joyce was pummelled with eggs and toilet paper.

The ACCC, using specialist data analysis and compulsory information notices, found Qantas cancelled about 15,000 of 66,000 flights on its May-to-July 2022 schedule. The legal proceedings relate to more than 10,000 of those scrapped services.

“Qantas made many of these cancellations for reasons that were within its control,” ACCC Chair Gina Cass-Gottlieb said. The actions “left customers with less time to make alternative arrangements and may have led to them paying higher prices to fly at a particular time, not knowing that flight had already been cancelled.”

“These are deeply concerning allegations,” Australian Treasurer Jim Chalmers said in a statement.