Qantas is facing a massive fine for selling tickets on flights that the airline knew would be canceled. The airline is making some pretty pathetic claims to try and get out of paying this…
In this post:
Qantas faces massive ACCC fine over canceled flights
A couple of months back, I wrote about how the Australian Competition & Consumer Commission (ACCC) launched an action alleging that Qantas has engaged in false, misleading, or deceptive conduct.
The airline is accused of selling tickets on flights that it had already canceled in order to generate more revenue. Specifically, the claim is that there were more than 8,000 flights scheduled to depart between May and July 2022, where Qantas kept selling tickets on its website for an average of more than two weeks after canceling flights.
We’re not just talking about a minor fine here, but rather the ACCC has asked a court to fine Qantas “hundreds of millions” of dollars. The ACCC wants to fine Qantas “significantly more than” the $125 million AUD fine that automaker Volkswagen was charged in 2019, for violating Australian consumer laws.
This case came at a time when the perceptions that Australians had of Qantas was at an all-time low, and this situation even caused former Qantas CEO Alan Joyce to resign early.
Qantas defends itself against allegations
Qantas’ response to the ACCC’s allegations have just been published, and the airline makes quite some questionable claims. The gist of Qantas’ defense is that the airline doesn’t actually sell tickets for any particular flight, but rather sells bundles that include transportation on a flight. Per Qantas:
The ACCC contends that Qantas supplies carriage on “particular flights”. Qantas disputes this. The “service” that Qantas supplies is not carriage on any “particular flight” but rather a bundle of rights that includes alternative options to which consumers are entitled in respect of a cancelled flight. Consistently with the provision of that service, by both its pre-contractual statements, and contractual terms, Qantas makes clear to ordinary and reasonable consumers that, while Qantas will do its best to get consumers where they want to be on time, it does not guarantee particular flight times or its flight schedules. Qantas says that, in light of those express statements, the ACCC’s allegations that Qantas, at any time, makes implied or partly-implied representations that Qantas will use reasonable endeavours to operate any “particular flight”, or that any “particular flight” has not been cancelled, are wrong.
That last part is perhaps the most bizarre claim of all. Qantas claims that the airline never says it will use reasonable endeavors to operate any particular flight. Really?!
Since the crux of the issue is that Qantas canceled flights and didn’t even let consumers know, the airline makes the argument that it’s under no obligation to let consumers know if flights are canceled, and the airline didn’t ever tell people that a flight hadn’t been canceled:
Qantas made no representation, at any time, that any particular flight had not been cancelled. Further, Qantas did not represent to consumers that the “Manage Booking” page would, at all times, necessarily reflect the latest scheduling decisions that Qantas had made.
The airline also (accurately) points out that the contract of carriage doesn’t guarantee that you’ll fly on a particular flight:
The terms on which Qantas treats, and contracts, with consumers reflect this. Qantas makes clear both in its pre-contractual statements and contractual terms that, while Qantas will do its best to get consumers to where they want to be on time, it does not guarantee flight times or flight schedules and they do not form part of a consumer’s contract of carriage with Qantas.
Qantas’ defense is a step too far
It’s not surprising that Qantas is trying to get out of paying this fine, because this could have a significant impact on the carrier’s bottom line. Also, I have to imagine that the ACCC’s intent here is largely to score bonus points with the public, given how unpopular of a company Qantas is at the moment.
That being said, I find Qantas’ defense to be ridiculous. Airline scheduling is incredibly complex, and it’s understandable that airlines need to modify their schedules as the departure date approaches. Airline contracts of carriage also do give airlines a lot of discretion with scheduling.
That being said, this defense feels similar to how car valets often have signs saying they accept no responsibility for any damage to your car. Like, if a valet drunk crashes someone’s car, they’re going to have some responsibility, whether they’d like to or not, and no matter what their sign says.
Qantas’ defense is that the company will do its best to get consumers where they want to be on time. If you’re selling tickets on flights that you know you’re going to cancel, then you’re not doing your “best” by any stretch of the imagination. Rather, that’s just called being deceptive, because the company is selling consumers something it knows it can’t offer.
Furthermore, I recognize it’s just a legal defense, but you’ve gotta love how low airlines will go with their defense. “Well, umm, maybe we didn’t tell people that their flight was canceled, but we didn’t tell it wasn’t canceled.” What a defense.
Bottom line
Qantas is facing a major fine from Australian regulators for selling tickets on flights that the airline knew would be canceled. The airline is defending itself by claiming that the airline doesn’t actually sell tickets on flights, but rather sells a “bundle of rights.” Furthermore, Qantas claims that the expectation from consumers that the airline will use reasonable endeavors to operate any particular flight is wrong.
I’m curious to see how this plays out in court…
What do you make of Qantas’ defense?
I reckon airlines need more regulation. This smells awfully similar to American Airlines’ recent defense that a mother should not be refunded for a full ticket (not just a lap child charge) she’d paid for her child, despite the airline preventing her from using that ticket and forcing the child to be taken on a stranger’s lap, because the child was technically still transported.
poor babies can not even make a simple case or claim. If you can not putit on one page, you are probably lying.
It's high freaking time we hold these weasels accountable. Sick of big corporations making laws that have language that allows them to sidestep any accountability.
As absurd as it sounds, arguably they are correct, dependent on how you interpret ICAO legislation.
Here's an excerpt from 'ICAO's Policies on Terms of Carriage and Aeronautical Revenues' section 52.3.7:
"all air operators shall issue a physical or digital document of entitlement to all passengers and failing to do so shall result in terms of carriage not being applicable to the air operator".
If you read Qantas' tariffs, the airline stipulates they offer...
As absurd as it sounds, arguably they are correct, dependent on how you interpret ICAO legislation.
Here's an excerpt from 'ICAO's Policies on Terms of Carriage and Aeronautical Revenues' section 52.3.7:
"all air operators shall issue a physical or digital document of entitlement to all passengers and failing to do so shall result in terms of carriage not being applicable to the air operator".
If you read Qantas' tariffs, the airline stipulates they offer "aerial transport" and makes no reference to "documents of entitlement" - the category under which tickets would fall. 'Aerial transport' is not something the ICAO legislates.
This will be a particularly interesting case to follow once it is inevitably in front of the court.
By withholding the fact that the flights they were offering for sale had already been cancelled they were deliberately misleading consumers in order to get them to enter into a contract they almost certainly would not have if they were in possession of the truth.
A contract isn't a defense against fraud.
The ACCC has already said that the contractual terms are not the issue, it's about misleading advertising. Qantas is alleged to have made public representations about what they were selling that were not true, and that is the test that applies under Australian consumer law. If they failed based on that test, it doesn't matter what the contract says, they would be guilty of breaking the law. For them to say 'We weren't actually selling...
The ACCC has already said that the contractual terms are not the issue, it's about misleading advertising. Qantas is alleged to have made public representations about what they were selling that were not true, and that is the test that applies under Australian consumer law. If they failed based on that test, it doesn't matter what the contract says, they would be guilty of breaking the law. For them to say 'We weren't actually selling what we advertised, we were selling a bundle of rights' is an admission of guilt.
The key point is that Qantas deliberately withheld pertinent information that a consumer would need to make an informed decision...that the flight they thought they were purchasing a ticket for had been cancelled and wasn't going to operate. The legal term for that is "fraudulent inducement." Getting someone to do someone they wouldn't have done had they known the facts.
It's such a blatant breach of common law I can't believe they are trying to...
The key point is that Qantas deliberately withheld pertinent information that a consumer would need to make an informed decision...that the flight they thought they were purchasing a ticket for had been cancelled and wasn't going to operate. The legal term for that is "fraudulent inducement." Getting someone to do someone they wouldn't have done had they known the facts.
It's such a blatant breach of common law I can't believe they are trying to offer a defense. They were crazy to do what they did, crazier still not to have quickly settled rather than offer up a defense that even a first year law student could demolish.
There’s a simple way to show their argument is absurd. When you pull up a flight and you try to book it, if that flight is sold out, you can’t buy a ticket. Similarly, based on their pricing algorithms, different flights on different days have different pricing (in conjunction with the number of seats left). If you were buying a right to fly on a random flight, why would you be stopped from buying if...
There’s a simple way to show their argument is absurd. When you pull up a flight and you try to book it, if that flight is sold out, you can’t buy a ticket. Similarly, based on their pricing algorithms, different flights on different days have different pricing (in conjunction with the number of seats left). If you were buying a right to fly on a random flight, why would you be stopped from buying if a flight were full or pay different prices if a ticket was a general pass?
I seem to remember AA making the same claim and even altered their conditions of carriage to reflect that... And they got away with it.
Presumably because no one wanted to kick up a fuss and hire an attorney over it. It's unlike Qantas will get away with this, given the public scrutiny.
Just speculating here, but Australia might possibly have stronger consumer protection laws than the United States.
So they're giving you a "Bundle of Rights number" instead of a ticket number, right?
Didn't the new CEO apologize and say they would try to improve things. So much for that promise...
If they had said they werent actually an airline, most ppl wouldve probably been fine with that statement.
I don’t understand why people get so up in arms when airlines are doing what they can to get you to your destination.
They make it very clear that you are buying a ‘ticket’ not a seat on a particular plane.
That’s clear enough English to me.
99.9999% you will be on the reserved flight, but that’s not what you are purchasing. You are essentially giving the duty to get you to the destination to...
I don’t understand why people get so up in arms when airlines are doing what they can to get you to your destination.
They make it very clear that you are buying a ‘ticket’ not a seat on a particular plane.
That’s clear enough English to me.
99.9999% you will be on the reserved flight, but that’s not what you are purchasing. You are essentially giving the duty to get you to the destination to the airline,
If things are outside their control, there may well be changes. The fact that the airline does everything in their power to get you to their destination is fulfilling their obligations.
But in this case they didn’t do everything in their power to get the ticketed passengers to their destination. It was in their power to use aircraft and crew to operate those flights but they chose not to.
What a load of crap. If airlines can put you on any flight then surely that means you should be able to book a flight next week then turn up at the airport and have the airline put you on a flight tomorrow? Didnt think so.
Whilst other comments are valid. I don’t disagree that in this case they didn’t do everything in their power (but mostly airlines do) and perhaps it’s not 99.9999% of the time that you do get the chosen flight, I do have to vehemently disagree with you frrp. Look into something called ‘fare difference’ - if you want to change your flight you are liable for any fare difference for the alternative flight, if the airline...
Whilst other comments are valid. I don’t disagree that in this case they didn’t do everything in their power (but mostly airlines do) and perhaps it’s not 99.9999% of the time that you do get the chosen flight, I do have to vehemently disagree with you frrp. Look into something called ‘fare difference’ - if you want to change your flight you are liable for any fare difference for the alternative flight, if the airline mess up and put you on a more expensive flight, that’s their prerogative, and a genuine attempt by the airline to make things right. No you can’t select any flight you like for the same price, but yes they can put you on a different flight be it more or less expensive to make things right. That’s not unfair it’s just trying to make a bad situation right.
Also, ffrp, if you turn up at the airport for a flight tomorrow, but you had booked it for next week, you can likely take a flight tomorrow for a nominal change fee as long as there is no fare difference. If you have purchase a flexible ticket it will actually cost nothing. If you have purchased a very restricted ticket, then you probably already know you can’t do that. Special and restricted tickets aren’t...
Also, ffrp, if you turn up at the airport for a flight tomorrow, but you had booked it for next week, you can likely take a flight tomorrow for a nominal change fee as long as there is no fare difference. If you have purchase a flexible ticket it will actually cost nothing. If you have purchased a very restricted ticket, then you probably already know you can’t do that. Special and restricted tickets aren’t the most common type of ticket by any means. Fully flex tickets also aren’t the most common, but those with nominal change fees are. So what you say is factually inaccurate, again, airlines sell you a ‘ticket’ not a reservation and seems more than clear use of English to me. You pay a change fee to change your reservation plus any fare difference if applicable. The fact that you assume you are booking a particular flight doesn’t make it a fact. Just to simplify a bit more you buy a ticket and a reservation, each has an associated price, some reservations have higher prices, some lower, many are the same. This does not take anything away from the fact that you have bought a ticket and can alter the reservation at will.
And if you’re saying why can’t you take a flight before you buy a ticket, I don’t think that question even warrants an answer. If you want to take a flight you need to buy a ticket. If you buy one two weeks later you’re free to use that once you buy it.
It's not 99.9999%, that's downplaying the scope of the issue by like 5 orders of magnitude. The airline situation in AU is f*cked and they -desperately- need some kind of compensation regulation for cancelled / delayed flights like EC261. Qantas were deliberately selling a LOT of tickets to flights that they already knew were cancelled, taking people's money, and then trying to screw them out of getting anything back. If AU airlines are going to...
It's not 99.9999%, that's downplaying the scope of the issue by like 5 orders of magnitude. The airline situation in AU is f*cked and they -desperately- need some kind of compensation regulation for cancelled / delayed flights like EC261. Qantas were deliberately selling a LOT of tickets to flights that they already knew were cancelled, taking people's money, and then trying to screw them out of getting anything back. If AU airlines are going to kill competition then it's time for the government to step back in and level the playing field with massive fines and consumer protections.
But they aren’t doing everything within their power. That’s the whole point. They are selling tickets on a flight that doesn’t exist. And they use price differentiation between flights. So you could pay more to be on that flight - but they don’t intend to fly it. You could then be out on a flight that costs less at a different time.
If the flights were actually cancelled, but Qantas kept selling tickets, then I'd agree with all of you that it's ridiculous to keep selling tickets. But if the planning team "knows" it will be cancelled, but it's not cancelled yet, that's entirely different. Maybe they are planning to cancel, but things could change, demand could spike, etc. That's a murky area, where do you draw the line? If you plan to cancel, but stop selling...
If the flights were actually cancelled, but Qantas kept selling tickets, then I'd agree with all of you that it's ridiculous to keep selling tickets. But if the planning team "knows" it will be cancelled, but it's not cancelled yet, that's entirely different. Maybe they are planning to cancel, but things could change, demand could spike, etc. That's a murky area, where do you draw the line? If you plan to cancel, but stop selling tickets, then it's a self fulfilling prophecy. I am not clear based on the post which is the accurate depiction of the situation.
It was covered in the news here in AU -- they were deliberately selling tickets for flights that had already been cancelled in many cases (not all)
And, further, they say "we didn't say it wasn't cancelled" is bs. Sure, they didn't post a notice on their site that said "this flight is not cancelled." But they sure implied it wasn't cancelled by selling tickets. Their argument makes about as much sense as some of the ones my kids made when they were five years old.
What for? Why did they do it?
And with that, I welcome Qantas to become an official American airline operating out of Australia, it has all the qualities of one already.
They have ex-AA boss Doug Parker on the board to finish it off. Somehow I don't have high expectations for the future if I were a customer.
Shareholders though, were obviously cheering.
Spot on!
The ACCC should run public service announcements featuring these statements by Qantas. Then, they can simplify them to "When you buy a ticket on Qantas, they might get you to your desired destination around the time you need to be there, maybe. But no promises. Think about that the next time you are considering flying either Qantas or another airline for your trip."
More like "bundle of bullsh*t"
No wonder Virgin Australia is more favored now
Their argument holds no water given every flight has a different price...if you just bought 'a ticket' and it was a set price, then it may have *some* merit.
They should be careful opening that can of worms....
"Bundle of rights" is a common legal concept to refer to a property interest. That said, I agree Qantas's claims here are ridiculous.
Man, Australians used to be proud of Qantas. What a shame
"Flight attendants are here for your safety, not your comfort or to serve you."
Clearly QF is still rotten to the core, getting rid of the CEO was insufficient, his successors are following the same playbook. Time for root and branch overhaul of QF leadership (board included) and, this time without the big payoffs
Qantas is probably trying to ride on public opinion forgetting in a year's time and the government being bribed enough that it won't do anything. They know there's no shortage of suckers and contracts to make a noticeable dent, especially while they try to keep competition out.
Scum company. I hope the government develops a spine and legislates something similar to EU261.
Qantas' General Counsel is getting roasted here in the local media and it will only gain more journalist's attention as the legal proceedings continue. Am I also allowed to attempt to make my original check in time but won't be penalised as I made every effort to do so but ultimately failed? Alan Joyce really took the flying public for granted and treated us like morons at times, and now this saga. I almost certainly...
Qantas' General Counsel is getting roasted here in the local media and it will only gain more journalist's attention as the legal proceedings continue. Am I also allowed to attempt to make my original check in time but won't be penalised as I made every effort to do so but ultimately failed? Alan Joyce really took the flying public for granted and treated us like morons at times, and now this saga. I almost certainly going to change camp & go all in with Singapore or Cathay. With Cathay I can still use the Qantas first class lounge and with Singapore they have quite a decent first lounge in Sydney for an outstation and both airlines serve my preferred destinations well. I have been so loyal to Qantas for the past 15 years but they really don't seem to give much of a sh*t so what is the point?
I'm not surprised.
And did the new CEO read the file?
If not, displays poor judgement on what matters - this is high profile.
If did, displays very poor judgement on how it would be seen, including the inventive mirrors from other commenters here.
Methinks a new new CEO may be coming shortly.
It may have been filed before the new CEO got there. But if not, yes, he was not paying attention to the right things.
The court should tell Qantas if they want that argument upheld then it will become law that a passenger buys a ticket to travel a route on a particular day rather than a particular flight. Said passenger can buy a ticket on the cheapest Friday morning flight and make a change to the peak Friday evening flight with neither a change fee nor a fare increase as they just bought the right to fly that...
The court should tell Qantas if they want that argument upheld then it will become law that a passenger buys a ticket to travel a route on a particular day rather than a particular flight. Said passenger can buy a ticket on the cheapest Friday morning flight and make a change to the peak Friday evening flight with neither a change fee nor a fare increase as they just bought the right to fly that day. It’s basically the same argument. I think Qantas would run from that so should abandon their childish stance.
That’s not how justice works. Judges don’t make laws dunno if you ever noticed…
that argument will go over like a lead balloon and could cause even more damage for QF and other Australian airlines down the road just to make consumer rights perfectly clear.