Qantas ordered to pay $100 million in fines for cancelled flights

Qantas, Australia's premier airline, has been fined $100 million for selling tickets on flights it had already cancelled and for delays in notifying passengers about the cancellations. This Federal Court decision follows Qantas' May agreement to pay $20 million in compensation to the many consumers impacted by the prolonged issue.

The company acknowledged that its senior managers were aware that cancelled flights were not immediately withdrawn from sale and that customers were not quickly informed of cancellations. Qantas has consented to overhaul its operational and scheduling systems to avoid future violations of consumer law.

The hefty fine was imposed by the court following a joint proposal by the Australian Competition and Consumer Commission (ACCC) and Qantas, suggesting it as a suitable measure to deter Qantas and other companies from future infringements of the Australian Consumer Law (ACL).

"This is a significant penalty, sending a clear message to all businesses, regardless of size, that there are grave repercussions for deceiving their customers," states ACCC chair Gina Cass-Gottlieb.

The ACCC initiated legal action against Qantas in August of the previous year, accusing the airline of misleading consumers by selling tickets and not promptly notifying them of flight cancellations, which they claimed was a violation of the ACL. "This significant penalty sends a clear message to all businesses, large or small, that they will face severe consequences if they deceive their customers," reiterated ACCC chair Gina Cass-Gottlieb.

In May of this year, Qantas acknowledged its intentional deception of customers and consented to a $20 million compensation payout.

Furthermore, Qantas collaborated with the ACCC to propose to the Federal Court a $100 million fine for its legal infractions.

At that time, Qantas CEO Vanessa Hudson offered an apology, admitting the airline had "disappointed customers" and mentioned that investments were being made in technology to prevent a recurrence of such issues. Following its May confession, Qantas has been in contact with nearly 87,000 customers eligible for a portion of the $20 million compensation.

These passengers, who between 2021 and 2023 had either booked flights that the airline intended to cancel or were reassigned to these flights following the cancellation of others, are set to receive payments ranging from $225 to $450, based on whether they were booked on domestic or international flights.

An additional 883,000 passengers are also believed to have been misled by Qantas's failure to promptly inform them of flight cancellations. However, these customers are not receiving financial compensation from Qantas as per its agreement with the ACCC.