Qantas CEO Vanessa Hudson says ACCC settlement will help rebuild reputation
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More news: Qantas chief executive Vanessa Hudson said it was important for the national flag carrier to have settled with the ACCC in order to move forward with its work to rebuild trust with customers.
"We've always maintained that there has been a damage to our reputation, and making the settlement today we think is a very important part in the steps to regain trust and to rebuild reputation," she said in a news conference with reporters.
Hudson said it was also important to point out that the $100 million civil penalty and $20 million remediation program for impacted passengers pertained to delayed communications in notifying customers of cancelled flights. She also noted that the consumer watchdog was no longer pursuing its claims of wrongful acceptance of payment, including any allegation that Qantas had taken payment for services it never intended to provide.
"We would never take fees or a fare from a customer and not deliver them a flight or actually not provide them a refund if we were not in the position of providing them an alternative," she said.
Qantas to pay $120m for misleading customers
The news: Qantas has agreed to a $20 million payout, and a possible $100 million penalty, after admitting that it misled consumers by advertising tickets for tens of thousands of flights it had already decided to cancel, and by cancelling thousands more flights without promptly telling ticketholders of its decision.
The numbers: As part of an agreement announced today, the Australian Competition and Consumer Commission (ACCC) and Qantas will ask the Federal Court to impose a penalty of $100 million on Qantas for breaching the Australian Consumer Law.
Qantas has also agreed in a court enforceable undertaking to pay around $20 million 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 reaccommodated on those flights after their original flights were cancelled.
Qantas will pay $225 to domestic ticketholders and $450 to international ticketholders. These payments are on top of any remedies these consumers already received from Qantas, such as alternative flights or refunds.
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.
The context: ACCC chair Gina Cass-Gottlieb said that Qantas did not decide to contest the case, admitting that the conduct occurred for a longer period and seeking to resolve the issue earlier for the benefit of the impacted customers.
Qantas has also undertaken to notify customers of cancelled flights no more than 48 hours from deciding to cancel the flight, and to stop selling cancelled flights within 24 hours of its decision to cancel. The undertaking also applies to its low-cost subsidiary, Jetstar.
In addition, Qantas will review its consumer compliance program and appoint independent auditors who will monitor Qantas’ compliance with the undertaking and provide reports to the Qantas board and the ACCC.
What they said: Cass-Gottlieb said: "We are pleased to have secured these admissions by Qantas that it misled its customers, and its agreement that a very significant penalty is required as a result of this conduct. The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law."
"Qantas’ conduct was egregious and unacceptable," she said. "Many consumers will have made holiday, business and travel plans after booking on a phantom flight that had been cancelled."
Qantas CEO Vanessa Hudson said: "We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn't happen again".
The source: ACCC media release
