by In agreeing to pay a $100m penalty and compensate thousands of customers to the tune of $20m for selling them tickets on flights that had already been cancelled, Qantas abandoned its farcical claim that, as an airline, it does not sell individual seats. service, but rather a “measure of rights”.
For new CEO Vanessa Hudson – who stepped down in the top job eight months ago after allegations aired in the consumer watchdog’s legal action against Qantas hastened the departure of former boss Alan Joyce – a retreat from her predecessor’s confrontational style what many argued was the Trash is the remarkable settlement. the brand of the airline.
While the move away from the “measure of rights” argument – when Qantas claimed it did not sell customers tickets to any particular flight, but a “measure of rights” that includes alternatives in the event of cancellations – is a positive step, it seems the airline that the airline is keen to deliver its headline concessions without detailing the details of the settlement.
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For an airline that knows how to choreograph a media opportunity when there’s good news to trumpet, Hudson’s one phone conference call to address Monday’s questions is telling.
The Australian Competition and Consumer Commission (ACCC) case was initially filed based on cancellation data during the May-July 2022 monitoring period – a window in which 15,000 out of 66,000 Qantas services were canceled – alleging it advertised and sold tickets for more than 8,000. flights it had already canceled in its internal system, and it took up to 47 days to notify affected customers.
However, Qantas admitted on Monday that by working with the ACCC on a settlement, it had uncovered thousands more cases of customers being sold tickets to flights that had already been cancelled.
Qantas has agreed to make compensation payments of between $225 and $450 to 86,597 consumers who, between 21 May 2021 and 26 August 2023, booked a domestic or international flight or were re-accommodated on a domestic or international flight after it was determined that already done to cancel the flight.
Both parties agreed that the issue was caused by a failure of Qantas’ internal systems, and this failure to invest in new technology and customer improvements despite delivering healthy profits and deals to shareholders was an imbalance that Hudson had already spoken about.
Specifically, in a compromise the ACCC agreed to allege that Qantas charged fees for dropping any service, and that the airline dropped its “rights measure” safeguards.
“They’re not going forward to defend on that basis anymore. They are accepting and admitting that they misled customers by selling tickets that were represented on the basis of continuing to fly at a particular time,” ACCC chair Gina Cass-Gottlieb said.
Qantas has also promised to stop selling flights that have been canceled within 24 hours of the decision to cancel, as well as to notify customers that flights have not been canceled more than 48 hours from the decision. to cancel the flight, in commitments also involving its budget carrier Jetstar.
Does this mean travelers can now trust their booking? And will the warning that departure date and time are not part of a customer’s contract with the airline now go from Qantas booking websites?
Hudson could not give any guarantees when pressed.
“Even on the ACCC website, it notes that airlines cannot guarantee specific flight times on specific dates,” she said.
The sheer size of the settlement may have left some of Qantas’ staunchest critics wondering if the airline got off lightly.
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Cass-Gottlieb had originally sought a $250m penalty but on Monday said she was satisfied with the lesser penalty because he received an early settlement, admissions of misconduct and promises to improve in the future.
Qantas’ strong financial position of late – in February Hudson reported a half-year pre-tax profit of $1.25bn and rewarded shareholders with a $400m buyback, following a record full-year profit of $2.47bn in 2022-23 – suggests it can the airline. the blow $120ma absorption.
In cutting a deal with the ACCC – which identified Qantas as the most complained about company for two years in a row – Hudson saved the airline potentially hundreds of millions of dollars and saved it from legal dispute long with negative coverage. (The cost of the alternative, Joyce-era approach will soon play out when Qantas finds out how much compensation – expected to top $100m – it has to pay for the illegal outsourcing of 1,700 ground handlers it fought tooth and nail to put cancelled.)
Despite this, it is clear that the settlement has been a great success for the ACCC.
His allegations have sent the public debate over Qantas’ leadership into overdrive, fueling talk of increased competition and consumer protections in aviation, with discussions about a mandatory cash compensation scheme for delays – which Qantas fiercely opposes – raised in Canberra ahead of the forthcoming aviation white paper. .
To that end, even if they are not one of the 86,597 customers set to receive payments from Qantas, Australian travelers also stand to benefit from the ACCC’s case.
