If convicted, each breach of consumer law faces a maximum penalty of $10 million, or three times the total benefits obtained. If the total turnover cannot be determined, the group may have to hand over 10 per cent of its annual multi-billion dollar turnover.
Qantas said it would examine the ACCC allegations and respond to them in full in court.
How Qantas allegedly failed customers
- QF93 was scheduled to depart from Melbourne to Los Angeles on May 6, 2022. On April 28, Qantas made the decision to cancel the flight. Despite this, it did not remove the flight from sale until May 2, and did not inform existing ticketholders of the cancellation until May 4 (two days before the flight).
- QF81 was scheduled to depart from Sydney to Singapore on June 4, 2022. On February 8, Qantas cancelled the flight, which was not removed from sale until March 27. Existing ticketholders were not informed of the cancellation until March 28.
- QF486 was scheduled to depart from Melbourne to Sydney on May 1, 2022. On February 18, Qantas cancelled the flight, which was not removed from sale until March 15. Existing ticketholders were not informed of the cancellation until March 16.
- QF649 was scheduled to depart from Sydney to Perth on July 30, 2022. On February 18, Qantas cancelled the flight, which was not removed from sale until March 7. Existing ticketholders were not informed of the cancellation until March 8.
- Other examples the ACCC listed of flights affected were QF63 scheduled to depart from Sydney to Johannesburg on July 31, 2022; QF1785 scheduled to depart from Gold Coast to Sydney on May 1, 2022; QF696 scheduled to depart from Adelaide to Melbourne on July 23, 2022; QF1764 scheduled to depart from Canberra to Gold Coast on June 27, 2022; QF513 scheduled to depart from Brisbane to Sydney on June 8, 2022; QF45 scheduled to depart from Melbourne to Denpasar on May 1, 2022.
“It’s important to note that the period examined by the ACCC between May and July 2022 was a time of unprecedented upheaval for the entire airline industry. All airlines were experiencing well-publicised issues from a very challenging restart, with ongoing border uncertainty, industry-wide staff shortages and fleet availability causing a lot of disruption,” a spokesperson said.
Treasurer Jim Chalmers said the allegations against Qantas were “deeply concerning”.
“This is the consumer watchdog doing its job and a reminder that businesses need to do the right thing by people,” he said. “Breaches of consumer law carry heavy penalties.”
Sydney Airport boss Geoff Culbert said the ACCC’s allegations amplify the need for the government to implement the findings of the 2020 Harris Review into the airport’s slot management system.
“We have been shining a spotlight on cancellations and delays for six years,” he said. “These allegations provide even more justification to implement the findings of the Harris review, including an immediate forensic audit into cancellations and slot misuse, a beefed-up compliance regime, and an enforcement process that punishes misbehaviour.
“Slots are owned by Australian taxpayers, and they should be used to benefit the public, not incumbent airlines.”
Qantas is already facing a class action on behalf of disrupted passengers who allege they were unable to be compensated for their cancelled flights.
The airline confirmed on Thursday afternoon it would contact all affected passengers to alert them of the new COVID-19 flight credit policy, which will come into effect from September 4.
Qantas boss Alan Joyce said the airline had scrapped the expiry date in the hope customers’ faith in the airline would be restored.
“We know the credit system was not as smooth as it should have been. And while we’ve improved it recently and extended the expiry date several times, people lost faith in the process. We hope this helps change that,” he said.
The airline is also offering a deal to double frequent flyer points as a way to encourage passengers to consider booking another flight instead of demanding a cash refund.
It’s the fourth time the company has amended its COVID-19 refund and flight credit policy in an attempt to lower the multibillion-dollar owed-credit balance it accrued over the period.
Passengers were previously eligible for a refund until December 2023. Those who already obtained flight credits from the company still have until the end of this year to book a flight.
Customers who booked flights through a travel agent can also get a refund, while those who have a flight credit from Jetstar will also be able to use them indefinitely.
There is still around $370 million that Qantas is yet to refund or exchange, and, as revealed by Jetstar boss Steph Tully after a hostile exchange with Senator Tony Sheldon at the hearing this week, its budget arm is sitting on another $100 million.
There is also an undeclared amount in overseas bookings. Sources close to Qantas say that amount ranges between $50 million and $100 million.
Qantas’ biggest rival, Virgin Australia, has around $100 million in COVID-19 credits yet to be used, down from a total sum of $1.2 billion accrued between September 2020 and the end of July 2022.
Virgin’s credits require passengers to book and travel by the end of December this year. They are also subject to the airline’s standard credits policy, which means only a certain number of seats on any flight can be booked by those trying to use a flight credit.
Regional Express, Australia’s third domestic carrier with about 5 per cent of the market, has refunded all passengers affected by cancellations over the lockdown period.