By David Winning
SYDNEY--Qantas said it has agreed to pay a civil penalty of 100 million Australian dollars (US$66.1 million) to resolve court proceedings with a regulator which alleged the airline had advertised tickets for more than 8,000 flights it had already canceled.
Qantas said its settlement with the Australian Competition and Consumer Commission also involves making individual payments of between A$225 and A$450 to more than 86,000 customers affected by the flight cancelations, depending on whether they booked short-haul or international routes. It expects those payments to total around A$20 million.
The agreement marks a new effort by Qantas to draw a line under missteps made in the aftermath of the pandemic that led to the early retirement of long-time chief executive Alan Joyce in September last year. Australians who frequently need to fly to cover the vast distances between the country's major cities had complained of lost luggage, high airfares and declining service levels in the months after Covid-related travel restrictions were rolled back.
However, the allegations by the ACCC marked the biggest threat to Qantas's reputation. The ACCC in August last year sued Qantas for engaging in false, misleading or deceptive conduct, alleging the airline kept selling tickets for canceled flights on its website for an average of more than two weeks. Qantas also didn't tell some existing customers that their flights had been canceled for an average of about 18 days, the regulator alleged.
"Qantas's conduct was egregious and unacceptable," Gina Cass-Gottlieb, chair of the ACCC, said on Monday. "Many consumers will have made holiday, business and travel plans after booking on a phantom flight that had been canceled."
Qantas said the remediation payments are on top of any alternative flights or refunds already provided to customers. It said around 94% of those affected were flying or domestic or trans-Tasman routes, with the remainder booked on its international network.
"When flying resumed after the Covid shutdown, we recognize Qantas let down customers and fell short of our own standards," said Vanessa Hudson, who replaced Joyce as Qantas chief executive last year.
She said Qantas didn't have the technology and systems in place to support people seeking to travel when pandemic restrictions were lifted, and that they weren't given timely notifications that their flights had been canceled.
Qantas's share price has recovered some 24% from lows reached not long after the ACCC took legal action and Joyce left the company, supported by the company buying back shares and ongoing strength in demand for travel even as cost-of-living pressures in Australia remain intense.
Write to David Winning at david.winning@wsj.com
(END) Dow Jones Newswires
May 05, 2024 18:43 ET (22:43 GMT)
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