Qantas' $100 million penalty for misleading customers gets court approval
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The news: The Federal Court of Australia has approved Qantas' agreed on penalty with the consumer regulator for misleading customers by advertising tickets for cancelled flights.
The numbers: In May, Qantas and the Australian Competition and Consumer Commission (ACCC) announced the jointly agreed $100 million penalty and settlement of the consumer lawsuit taken by the regulator.
This included $20 million to be paid to more than 86,000 customers who were sold tickets on flights that Qantas had already decided to cancel, or in some cases who were re-accommodated on these flights after their original flights were cancelled.
Qantas must also pay $400,000 in legal costs to the ACCC within 30 days of today's court orders.
In a brief hearing on Tuesday morning, barrister Chris Caleo KC, who appeared on behalf of the ACCC, said maximum penalties for part of the contravening conduct could have reached between $4.5 billion and $6.1 billion, However, given a company cannot be penalised multiple times for the same conduct and multiple other factors put to the court, a lower penalty was agreed to.
The context: In August 2023, the ACCC launched Federal Court action against Qantas alleging that, between 21 May, 2021, and 7 July, 2022, Qantas advertised tickets for more than 8,000 cancelled flights.
It was also alleged that, for more than 10,000 flights scheduled to depart in May to July 2022, Qantas did not promptly notify existing ticketholders that their flights had been cancelled.
In May, ACCC chair Gina Cass-Gottlieb said reaching a swift settlement was a pragmatic decision, and it achieved the best outcome for consumers while setting a new industry standard for flight cancellations.
The source: Federal Court of Australia
