Australian regulator seeks record penalties of over $250 million against Qantas

Company News

by Glenn Dyer

The competition and consumer regulator is pursuing unprecedented penalties exceeding $250 million against Qantas, accusing the airline of selling tickets for cancelled "ghost flights" as part of a campaign to intimidate businesses that deceive customers.

Australian Competition and Consumer Commission (ACCC) Chairwoman, Gina Cass-Gottlieb, stated on ABC Radio National that this should set a new benchmark in fines for such violations, surpassing the previous record of $125 million imposed on Volkswagen for breaching Australian consumer law.

As a result of these allegations, Qantas shares experienced a 1.5% decline in early trading on Friday, culminating in a loss of over 6% over the past five days.

The ACCC's claims against Qantas involve the sale of tickets on its website for more than 8,000 domestic and international flights initially scheduled for departure between May and July 2022—despite the airline having cancelled these flights.

According to the Commission, Qantas persisted in selling tickets on its website for an average duration of more than two weeks, and in certain instances, for up to 47 days following flight cancellations.

Furthermore, the ACCC contends that Qantas failed to notify existing ticket holders for over 10,000 flights set to depart from May to July 2022, leaving them unaware of cancellations for an average of about 18 days, and in some cases, up to 48 days.

The regulator alleges that Qantas neglected to update its "Manage Booking" web page to reflect the flight cancellations, affecting a substantial percentage of flights grounded between May and July 2022. Approximately 70% of cancelled flights faced extended periods during which Qantas either continued selling tickets or delayed informing existing ticket holders about the cancellations, often both for two days or more.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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