Australian company admits to breaching consumer law
Qantas Airways has been hit with a $100 million penalty by the Federal Court of Australia after it was found guilty of misleading consumers by selling tickets for flights it had already decided to cancel. The penalty is one of the largest imposed for a breach of Australian Consumer Law.
The ruling comes after a case brought by the Australian Competition and Consumer Commission (ACCC), which revealed that the airline continued to sell tickets and delayed notifying customers about cancellations for thousands of flights over a two-year period. As many as 880,000 consumers were impacted by these practices from May 2022 to May 2024, which caused significant inconvenience and, in many cases, additional costs as travelers scrambled to make alternate arrangements.
“This is a substantial penalty, which sets a strong signal to all businesses, big or small, that they will face serious consequences if they mislead their customers,” ACCC chair Gina Cass-Gottlieb said.
In addition to the $100 million penalty, Qantas has committed to paying around $20 million to consumers who were directly affected. This compensation will be distributed through a consumer remediation program to those who purchased tickets on flights Qantas had already decided to cancel or who were re-accommodated on canceled flights.
Qualified consumers have been informed by Qantas and Deloitte—the program’s administrator—to expect payments of $225 for domestic passengers or $450 for international travelers.
Meanwhile, the ACCC’s investigation revealed that Qantas knowingly allowed the continued sale of tickets for canceled flights and delayed informing ticketholders about the cancellations, sometimes for up to 62 days. The airline admitted that its senior management was aware of the problem but failed to act quickly to resolve the issue, benefiting from revenue gained from passengers who were unaware their flights had been canceled and were therefore less likely to switch to another airline.
The penalties focus on two key violations: first, Qantas continued to sell tickets for canceled flights for several days after deciding to cancel them; second, it failed to promptly notify existing passengers or update flight statuses on the ‘Manage Booking’ page.
Qantas has since updated its systems to avoid a repeat of this issue. Additionally, the airline has agreed to enhance its compliance programs as part of the court order. The ACCC praised Qantas for its cooperation in resolving the matter early and for taking steps to implement the remediation program ahead of the court ruling.
Consumers who believe they are eligible for compensation have until May 2025 to submit their claims. Any remaining funds from the $20 million compensation pool will be donated to a charity approved by the ACCC.
Qantas has also been ordered to cover part of the ACCC’s legal costs as part of the settlement.
