Deciphering Qantas' Ghost Flights Scandal, Which Led to $66 Million Fine

Australia's competition watchdog, the Australian Competition and Consumer Commission (ACCC), revealed that Qantas “admitted it misled consumers” by advertising seats on tens of thousands of flights, despite those flights having already been cancelled.

What's the problem?

The national airline Qantas, which has long been nicknamed the 'Spirit of Australia', has been in the news for the wrong reasons in recent months. The airline was accused of selling tickets for flights that had already been canceled. The scandal also extended to the company failing to adequately inform customers of these cancellations and providing flight credits with expiration dates for trips affected by the COVID-19 pandemic.

Allegations against Qantas include a delay in notifying ticket holders of cancellations, with an average notice period of 18 days for 10,000 flights. As a result, several consumers had to suffer through failed and inconvenient attempts to reschedule their appointments, even leading to financial loss for many.

From the Western Australiathe ACCC sued Qantas through the Federal Court, claiming the airline sold tickets for more than 8,000 flights between May and June 2022, despite these flights having already been cancelled.

At the time of the investigation, the airline was already facing criticism on multiple fronts, including criticism for exorbitant ticket prices, accusations of substandard service quality and the controversial dismissal of 1,700 ground staff during the Covid-19 pandemic.

When the allegations were first made, Qantas denied any wrongdoing

The airlines defended their decision to sell seats on canceled flights, arguing that instead of purchasing tickets for individual seats, customers would receive a “bundle of rights” and a commitment from the airline to “do its best to get consumers where they want to be.” time”. It can be noted that Qantas posted an annual profit of $1.1 billion last year, marking a significant financial recovery after the turbulence in travel caused by the pandemic.

Findings of the ACCC investigation

At the end of the ACCC investigation, the airline acknowledged engaging in such malpractice in May 2021 and August 2023, a period that also coincided with the most severe phases of the pandemic. The ACCC described Qantas' behavior as 'egregious and unacceptable'.

As part of a settlement agreement between Qantas and the ACCC, 86,000 affected customers will receive $13 million in compensation. The aforementioned $66 million fine must still be approved by the federal court.

Speaking at a press conference, ACCC chair Gina Cass-Gottlieb said the commission chose to settle for sidestepping “legal semantics” and stressed the importance of prioritizing refunds to customers.

“In the interest of an early settlement and additional payments and compensation to customers, we are no longer requiring them to admit to breaching the service and receiving payment without the intention of providing the service,” Ms. Cass said. -Gottlieb said and added: “It's very interesting what the legal semantics might say, what we see as very important is that Qantas admits that it misled customers by continuing to sell tickets for flights that they had already decided to cancel .”

Qantas' explanation and plans for the future

While Qantas CEO Vanessa Hudson said the company was providing customers with adequate support, she added that the airline planned to start remediation work before court approval. The Chronicle quoted her as she said.

“Today marks another important step forward as we work to restore confidence in the national carrier. When flying resumed after the Covid shutdown, we realized that Qantas let customers down and failed to meet our own standards. We know that many of our customers have been affected by our failure to provide timely cancellation notices and we sincerely apologize for this. We have since updated our processes and are investing in new technology across the Qantas Group to ensure this does not happen again. We are focused on making the recovery process for customers as quick and seamless as possible,” said Ms Hudson.

She added: “The return to travel was already stressful for many and we were not providing enough support to customers and did not have the technology and systems in place to support our people.”

On the fine, Ms Cass-Gottlieb of ACC said: “This $100 million [Australian dollars] If the fine is upheld by the Federal Court, it will send a strong message to Australian businesses that they must comply with Australian Consumer Law.