Qantas could be facing a fine of hundreds of millions of dollars for a practice that it engaged in on a widespread basis last year…
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Australian regulator comes after Qantas’ canceled flight tactics
The Australian Competition & Consumer Commission (ACCC) has just 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.
The ACCC claims that for more than 8,000 flights scheduled to depart between May and July 2022, Qantas kept selling tickets on its website for an average of more than two weeks, and in some cases for up to 47 days, after canceling flights.
On top of that, for more than 10,000 flights scheduled to depart between May and July 2022, Qantas did not notify existing ticket holders that their flights had been canceled for an average of 18 days, and in some cases for up to 48 days.
For a sense of just how widespread these issues were, roughly 25% of Qantas’ total network was canceled over that period, and these issues impacted 70% of those cancelations. In other words, for about 18% of Qantas’ total flights, the airline either continued to sell tickets for two or more days, or delayed informing existing ticket holders that their flights have been canceled for two or more days.
Here are a couple of examples that are provided:
- For the May 6, 2022, flight QF93 from Melbourne to Los Angeles, passengers were notified of the cancelation two days before departure; one consumer was provided a replacement flight a day before their original departure date, which was communicated only through the Qantas app, leading to $600 AUD in out of pocket expenses
- For the July 29, 2022, flight QF73 from Sydney to San Francisco, Qantas sold 21 tickets after it had canceled the flight, with the last ticket being sold 40 days after the cancelation
Here’s how ACCC Chair Gina Cass-Gottlieb said describes this:
“The ACCC has conducted a detailed investigation into Qantas’ flight cancellation practices. As a result, we have commenced these proceedings alleging that Qantas continued selling tickets for thousands of cancelled flights, likely affecting the travel plans of tens of thousands of people.”
“We allege that Qantas’ conduct in continuing to sell tickets to cancelled flights, and not updating ticketholders about cancelled flights, 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.”
“There are vast distances between Australia’s major cities. 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. Cancelled flights can result in significant financial, logistical and emotional impacts for consumers.”
Regulator seeking massive penalties for Qantas
Okay, you might think the regulator is just trying to fine Qantas some small token amount, as we often see against airlines, but that’s not the case here. Instead, the ACCC has asked a court to fine Qantas “hundreds of millions” of dollars. As the ACCC Chair describes this:
“We are going to seek a penalty that will underline that this is not just to be a cost of doing business, it is to deter conduct of this nature.”
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.
Under Australian law, the maximum penalties for a breach of Australian consumer law is the greater of $10 million AUD, three times the total benefits that have been obtained or are reasonably attributable, or 10% of the corporation’s annual turnover.
Qantas’ annual turnover was $19.8 billion AUD during the financial year, so the potential fine here is huge.
My take on this action against Qantas
Qantas’ reputation in Australia has taken a nosedive since the start of the pandemic. While there are aspects of Qantas that are great, I’ve never had much respect for the company’s senior management.
CEO Alan Joyce has for years run the airline in the most cutthroat and greedy way imaginable, with little regard for employees or customers. While I understand he’s running a publicly traded, for-profit company, that doesn’t excuse the level of disregard he has shown for others.
So along those lines, I imagine part of the reason the ACCC is coming after Qantas so hard is because politically it’s popular to go after Qantas right now.
As far as the substance of the action goes, I’m happy to see an airline being held accountable for these kinds of practices. Unfortunately, though, they’re common among so many airlines, so I’m not sure Qantas is necessarily much worse than competitors here, other than the quantity of flights it canceled in mid-2022.
It is indeed outrageous how poorly airlines sometimes communicate flight cancelations, and also how they announce that they’ll cancel a flight, but then continue to sell tickets. If Qantas does face a huge fine, hopefully it starts the process of airlines being a bit more accountable on this front in the future.
Bottom line
Australian regulators are looking at levying a huge fine against Qantas, for how the carrier handled flight cancelations. This not only involves selling tickets on flights that had already been canceled, but also not informing customers of flight cancelations even weeks after intentions to cancel a flight were known.
Regulators are really trying to make an example of Qantas here, and could fine the airline hundreds of millions of dollars. The reality is that Qantas is hardly on its own when it comes to acting this way, though accountability has to start somewhere. I’m curious to see what comes of this case.
What do you make of the ACCC going after Qantas?
Make them hurt with the maximum fine. Take them for all they got.
Good to see the trolls out and spreading their mis-information. In Australian over 30,000 businesses and 2 million individuals received COVID payments. Unless they all need to pay it all back, then why single out Qantas, because after three years of heavy losses, they are now making money... Virgin Australia received $400 million from the Government as their Private Equity Owners were selling and cashing in most of their fleet. (A330's/777's). On the ACCC matter...
Good to see the trolls out and spreading their mis-information. In Australian over 30,000 businesses and 2 million individuals received COVID payments. Unless they all need to pay it all back, then why single out Qantas, because after three years of heavy losses, they are now making money... Virgin Australia received $400 million from the Government as their Private Equity Owners were selling and cashing in most of their fleet. (A330's/777's). On the ACCC matter - I actively search for cheaper flights (early mornings) on their schedule that I hope will be cancelled - because then I can opt for a flight that was more expensive, and at a time when I actually wanted to fly, saving me money. You can only apply damages when the situation has left consumers out-of-pocket, and in most (and I would say all) situations the airline hasn't been able to generate income through this style of booking management (which most airlines do). On the Qatar landing rights - no one flies to Qatar, and hence when it came to negotations the Government is expected to get a benefit for its own airlines. Qatar has nothing to offer in reciprication for expanded access. We already have open skiies with the US and over 30 international airlines that fly into most of the major airports so 21 extra flights for an airline whose MD is on the record as saying a woman couldn't run Qatar because they are 'too emotional'. Be careful about who you jump into bed with. Al Baker is a nut job.
Alan Joyce could not have said it better himself! Who knows, maybe Alan is reading OMAT now in his lucrative retirement...
Qantas is currently one of the most despised brands in Australia, and Luck, you're spot on in your assessment of Joyce's contribution to this. It is almost a national sports now to complain about Qantas, and in my mind, those complaints are almost always right. The fact that they are only launching this now, when Joyce is about to leave his post, is just another manifestation of the boys club culture. I'd normally feel for...
Qantas is currently one of the most despised brands in Australia, and Luck, you're spot on in your assessment of Joyce's contribution to this. It is almost a national sports now to complain about Qantas, and in my mind, those complaints are almost always right. The fact that they are only launching this now, when Joyce is about to leave his post, is just another manifestation of the boys club culture. I'd normally feel for Vanessa Hudson who is taking over this basket-case, but she had a big contribution to the current state of the business.
I have just returned from Asia, flying the national carrier of that country, rather than Qantas. It was my first time with them and I did not know what to expect - work booked the tickets as they were 30% cheaper than the Qantas alternative. The flight was superior to Qantas in every single aspect, most noticeably its ability to depart and arrive on time and the service by the charming team. Like many Australians, this is probably my year to expand my airline choices.
Nothing will change until people like Alan Joyce face jail time
You're an idiot. And a troll.
Qantas cancelled a flight on me , I eventually got through to them and asked what my pptions were . They told me as I missed the second flight they class me as a no show , and I need to make alternate arrangements myself . BTW I was travelling business (just for info). Overall it is hard to recognise that 15 years ago this was amongst the worlds best airlines , staff still try...
Qantas cancelled a flight on me , I eventually got through to them and asked what my pptions were . They told me as I missed the second flight they class me as a no show , and I need to make alternate arrangements myself . BTW I was travelling business (just for info). Overall it is hard to recognise that 15 years ago this was amongst the worlds best airlines , staff still try but management sabotage the staffs efforts to provide good service at every opportunity.
Qantaslink (the regional arm) was the last standout still providing excellent service , but I see they have recently have got rid of the management who still had this service mindset.
Its rather sad to see what was an excellent airline being destroyed by toxic directors & executives , these people have no shame .
Let them pay huge fines and bail them out later when they apply for bankruptcy protection.
This is the reason why QF blocked Qatar Airways from the market, they see that themselves failing and think that they could block other carriers from the market, what a failure.
This one time a bad thing happened to me while I traveled.
And all of a sudden the usual Qantas sycophants have gone quiet in defending such a a toxic airline. Especially those in the media and who militantly defend them on online forums like brainwashed Jihadis.
We all know who you are, and each and every one of you are a disgrace to yourselves and Australia.
You're an idiot and a troll.
This is classic Alan Joyce. This is the way he has run Qantas for 15 years. He doesn’t care about customers, staff or the national interest. He only cares about himself and by most accounts is a megalomaniac.
Unfortunately Irish CEOs have an awful reputation as they don’t care about anything other than money. Like Willie Walsh destroyed BA, Alan Joyce has done the same at QF. When I was visiting Australia last year,...
This is classic Alan Joyce. This is the way he has run Qantas for 15 years. He doesn’t care about customers, staff or the national interest. He only cares about himself and by most accounts is a megalomaniac.
Unfortunately Irish CEOs have an awful reputation as they don’t care about anything other than money. Like Willie Walsh destroyed BA, Alan Joyce has done the same at QF. When I was visiting Australia last year, many people told me there will probably be cheers in the street when he finally leaves the company. He’s probably the most reviled person in the whole country!
The problem is who will get that money. If I was affected by it I would not be happy and want them to pay my expenses etc. but if they are fined where will the money go.
Qantas had it coming. They really need the book thrown at them for their unscrupulous business practices along with their incompetent and dysfunctional, horrid customer service. I’m still fighting them for a refund from a cancelled flight (July 2022). Meanwhile, they’ve recorded a record profit at the expense of their customers, burned any remaining goodwill, and Alan Joyce rides off into the sunset with a nice big bonus.
I think almost even more shocking is the fact that QF have cosied to the federal government and got them to block the increase of more QR flights with the Qatar flight cap - something that would benefit all consumers and bring down airfare prices (but of course QF and EK want to hold the market captive).
It sure seems Australia could use more competition and choice in airlines.
Two words: Alan Joyce
Lol I don’t think the ACCC will be pursuing air Canada any time soon
Australias deputy prime minister also said the decision to block more Qatar airways flights was to protect the national carrier. Wtf. It’s a publicly traded company that has a huge pnl. Talk about taking from the poor (ish) and giving to the rich.
Australians are “angry” at Qantas yet nearly every single point earned on an Australian credit card...
Lol I don’t think the ACCC will be pursuing air Canada any time soon
Australias deputy prime minister also said the decision to block more Qatar airways flights was to protect the national carrier. Wtf. It’s a publicly traded company that has a huge pnl. Talk about taking from the poor (ish) and giving to the rich.
Australians are “angry” at Qantas yet nearly every single point earned on an Australian credit card goes straight to wantas. Tons of my mates can not be convinced to swap to aadvantage despite earning a huge amount of points each year. It’s bizarre
Good news is - they'll get fined big and hopefully someone high up will get fired. Bad news - nobody in Australia will ever let them come close to failing, and the market will remain as uncompetitive and dominated by QS as it is today. So in short - nothing really changes.
Just noticed that the ACCC lawyer who filed the claim to the Federal Court of Australia is named Helen Joyce. :)
Good. Onto the next piece of scum, Air Canada.
I say make an example is made of Qantas! Teach the other airlines a lesson.
The actionable information I get from this is that it might be worthwhile to check that the flight one is about to book isn't shadow-canceled as described here. How would one check that?
Surely of the flight was cancelled it wouldn’t be open for sale in any GDS as the status would then change from HK to UN or HX. It can’t be so straightforward. An airline can’t really sell seats on a fight they know won’t operate. It’s also not going to generate any revenue if it has to be refunded.
A GDS (of which there are several) is an intermediary system that connects to an airline's internal inventory system. An airline's website 99.9% of the time no longer processes bookings via a GDS system, and instead are "Direct Connect"-ed to the airline inventory...and it's also cheaper as GDS's charge fees for the service for each booking. So it comes down to how QF manages its internal inventory software...which they can do almost anything with...
PS - the airline could use the funds to hedge in the period between payment and refund, or just cynically think that they can still book the revenue by planning on reroutings paxs onto other of their services. Either way, no matter what, it's very unethical conduct.
This is the airline that stole massive amounts of cash during the pandemic from Australian taxpayers that it has never paid back. Having been on the receiving end of their poor customer service with regard to canceled flights, I hope they get nailed to the wall on this. The airline needs more competition, but Australian regulators refuse to allow that. They just blocked Qatar from adding more flights. As an Australian who has flown this...
This is the airline that stole massive amounts of cash during the pandemic from Australian taxpayers that it has never paid back. Having been on the receiving end of their poor customer service with regard to canceled flights, I hope they get nailed to the wall on this. The airline needs more competition, but Australian regulators refuse to allow that. They just blocked Qatar from adding more flights. As an Australian who has flown this airline all my life, it kind of sickens me what it has become and how the Australian government protects it.
Selling a product you have no intention of delivering is fraud. It is criminal and not just civil. QF is getting off easy.
Does USDOT have a position on this for affected US itineraries?
-G
Hopefully, the fine will fit the magnitude of the crime. In the meantime, what about the customers who were damaged? They should be allowed to make claims and recover, and well beyond the refund price of the ticket.
Good! Do Air Canada next.....
When a flight is cancelled inventory closes the availability.
The original PNR flight status change from HK into HX.
How can they keep on selling flights.
Something’s not clear here.
And what’s the point for QF. If they sell tickets on a flight they know will not operate they have to refund so it’s not a revenue generator.
Beats me.
One of the worst aspects of this was the lag between when Qantas had cancelled the flights on their system, and how late they notified passengers of the cancellation, often only a day or two before the date of travel - meaning that passengers who needed to travel on that day were more likely to accept whatever less convenient alternative rerouting Qantas offered them, lowering the likelihood of needing to issue refunds.
Oh my goodness. You don't seem to know about the *other* Qantas scandal here: their disinclination - by a variety of means- to refund customers. A week ago, before a Senate inquiry, Qantas said they had about A$300 mill in unredeemed credits that they were going to *keep* if unclaimed by year end. Then they got exposed - it was about A$550 million!! Straight into their pockets. But an outcry resulted in them cancelling the...
Oh my goodness. You don't seem to know about the *other* Qantas scandal here: their disinclination - by a variety of means- to refund customers. A week ago, before a Senate inquiry, Qantas said they had about A$300 mill in unredeemed credits that they were going to *keep* if unclaimed by year end. Then they got exposed - it was about A$550 million!! Straight into their pockets. But an outcry resulted in them cancelling the 'deadline'. They still will hold unclaimed credits, but not pocketing them. Not refunding the money to credit cards.
There will be no change without consequences. Make horrible decisions, pay horrible fines. Their salty tears will nourish us. Write the check Joyce.
This is all about improving their cash flow. They hold consumers cash for a service they don't intend on providing (unless the consumer takes an alternative routing) and creates refunds slowly. This had to be known on the CEO level and there should be a criminal investigation.
I guess Qantas has lost a bit of their glamorous sheen. I think it’s time for the Australian giant to eat some humble pie.
This was on the cover of every single Oz paper today, and locals were buzzing about how QF (and Alan Joyce) had this coming.
QF has some major PR work ahead of itself.
I know Avelo should be responsible. I use to work for them and even our supervisor admit that communication for cancellations was not sent out when they had a market exit for AZO-TPA. But of course when I complained too much they terminated me suddenly due to "attendance"
It’s great to keep airlines accountable for shady conduct like this but do the fines every get passed down to those who suffered from this? Seems like fund just transferring between corporations and governments leaving the consumers high and dry
You allege that many airlines continue to sell tickets after canceling flights. Do you have proof of that?
I recall just the other week that AAmerican AAirlines got hit with a "record" $4.1 million fine... meanwhile, their Q2 profit was $595K per HOUR. $4 million is "cost of doing business." Something like this actually has the potential to actually incentivize improved behavior.
Good. The reason things like this happen is because the penalties are not enough of a deterrence. Ideally huge fines, which might prompt the Board to make legally compliant behavior of Execs be a condition for any bonus payments. Might give Joyce pause for thought if it would hit his pocket
Good on the Australian government.
For many months during the pandemic - and this period was still during the covid recovery period - many airlines used consumers as their line of credit. They sold tickets, withheld refunds, and changed schedules in order to get cash from consumers for products they would not deliver.
If QF can order billions of dollars in new aircraft, it can pay the fine and other governments (on the...
Good on the Australian government.
For many months during the pandemic - and this period was still during the covid recovery period - many airlines used consumers as their line of credit. They sold tickets, withheld refunds, and changed schedules in order to get cash from consumers for products they would not deliver.
If QF can order billions of dollars in new aircraft, it can pay the fine and other governments (on the opposite end of some of those flights) can join the Australian government to not only make it clear this type of behavior is not acceptable in crisis but also in good times.
If airlines don't have lines of credit and cash going into crisis and can't get financing, they need to be allowed to fail along w/ every other business.
Yes good on the Australian Govt for going after QF (which politically is the correct thing to do - base on the amount of public scrutiny) but what about their decision to block more QR flights? I am unsure who's side the government is on.
Though the ACCC is an independent statutory body granted powers by the government, without any roles or decisions from the government. That explains why the ACCC is cracking down, but blocking QR fiasco was decided by the minister... Shame that decision isn't also independent!
It was the The Australian Competition and Consumer Commission who went after Qantas. It was the Australian government who protected Qantas' profits (Assistant Treasurer's words) by not allowing Qatar more access to our market.
Feasibly could a credit card network/issuer penalize or cut off QANTAS or at minimum increase the withholding period? This seems like it would violate every merchant agreement. Smaller carriers in a more precarious state have had funds withheld until actual date of travel.
Brilliant. Many airlines are extremely poor in communications on cancellations. Clearly this has been Qantas' business model rather than occasional incidents.
A fat fine seems appropriate.