Qantas - Sale of tickets for cancelled services (Ghost Flights)

In August 2023 it was alleged that Qantas was selling tickets on its website for flights it knew were cancelled. The allegations suggested that 884,000 customers had been sold tickets for cancelled services and were not swiftly notified.

Background

Post the COVID pandemic, as Australian airlines recovered (2020 to 2023), the Australian Government directed the Australian Competition and Consumer Commission (ACCC) to monitor the aviaiton market. In this period the ACCC received more complaints about Qantas than any other company, half of all complaints about Qantas related to flight cancellations.

Incident

Many customers during this period identified a flights being cancelled for times that they had allocated, often affecting the same customer/trip multiple times. At the time Qantas were citing concerns with staffing levels being unable to keep up with unexpected demand, and directed customers to time limited flight credits, or moved customers to alternative flights.

During this period Qantas had long hold times to talk to representatives in relation to these flights with customers commonly waiting many hours to talk to an agent. This further compounded issues when in some instances customers were being notified of the cancellation at very short notice.

The public opinion soured further due to the large number of Australian staff layoffs that Qantas undertook during the COVID pandemic, which a Federal Court decision later determined to be illegal. This was further exacerbated by Qantas being the largest JobKeeper recipient of all Australian businesses. (JobKeeper was an Australian Government scheme to support businesses during the COVID pandemic and support them retaining their employees.)

Qantas's response

Qantas published a media release stating concerns with resuming services post COVID as a challenge. It claimed that it was impacted with staffing issues and supply chain issues colliding with significant demand for services.

Qantas claimed that the ACCC ignored the key conditions on the sale of a ticket, where whilst an airline endeavours to met the timetable, no airline can guarantee flying on time. Qantas cited weather and operational issues mean cancellations are inevitable and unavoidable. As such they would always endeavour to get a customer to their destination as close as possible to the flight time they booked.

Qantas cliamed that:

• 100 per cent of delayed/cancelled domestic passengers were offered same-day flights prior to or within one hour of their booked time.
• 98 per cent of impacted international passengers were offered flights within a day of their booked flight.
• In most cases, customers were rebooked on these alternative flights weeks or months ahead of when they were actually due to travel, allowing them to adjust their plans.

Qantas denied that communications were delayed it achieve a benefit or commercial gain. (for example to protect slot space at crowded airports)

Lawsuit

The ACCC launched court action against Qantas in August 2023 in the Federal Court.

Claims

That Qantas was engaging in false, misleading and deceptive conduct. The specific claims lodged with the Federal Court were that Qantas had:

• engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 18 of the Australian Consumer Law (ACL);
• made false or misleading representations as to the quality, performance characteristics, uses or benefits of the flights, in contravention of s 29(1)(b) and 29(1)(g) of the ACL; and
• engaged in conduct that was liable to mislead the public as to the characteristics or suitability for their purposes of particular flights, in contravention of s 34 of the ACL.

Also, that by accepting payment for the flights, there were reasonable grounds for believing that Qantas would not be able to supply the flights within its specified time, and that Qantas was, or ought reasonably have been, aware of those grounds, so had engaged in conduct in contravention of s 36(3) of the ACL

The ACCC's claim alleged that between May and July 2022 Qantas was advertising tickets for more than 8,000 flights that it had already cancelled but not removed from sale, for some cases up to 47 days after the flight was cancelled.

It was also alleged that for more than 10,000 in the same period, Qantas didn't notify existing ticket holders that their flights had been cancelled for an average of 18 days, and in some instances up to 48 days.

This conduct affected up to 70% of cancelled flights for the period.

The ACCC provided the court a series of impacted flights it had identified in its investigations.

Outcome

After the Federal Court decision Qantas accepted responsibility for the incident and stated that they had updated their process and policies to ensure it doesn't happen again.

The Federal Court Ordered Qantas to pay $100 million in penalties for misleading consumers.

Qantas also gave an undertaking to the ACCC that it would pay $20 Million to consumers who were affected.

References

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