Qantas has agreed to compensate customers and pay a hefty fine for misleading claims. 

Qantas Airways Limited has consented to a court-enforceable undertaking to compensate over 86,000 customers and pay a substantial penalty, pending court approval, following misleading practices concerning flight cancellations. 

This resolution comes after legal action launched by the Australian Competition and Consumer Commission (ACCC).

The airline acknowledges that it misled customers by selling tickets for flights it knew would be cancelled and not promptly informing ticket holders of cancellations. 

As a result, Qantas has agreed to pay approximately $20 million in compensation to affected consumers and is also facing a proposed $100 million fine for violations of the Australian Consumer Law.

Under the terms of the settlement, Qantas will provide $225 to domestic ticket holders and $450 to those who purchased international tickets. 

These payments are in addition to any previous compensations, such as refunds or alternative flights, that customers might have received from the airline. 

The total estimated value of the payment scheme is around $20 million, addressing grievances from May 2021 to August 2023 for flights scheduled up to May 2024.

The ACCC initiated legal proceedings in August 2023, accusing Qantas of advertising more than 8,000 cancelled flights and failing to timely notify passengers about over 10,000 flight cancellations planned from May to July 2022. 

This extended pattern of misconduct has now been acknowledged by Qantas to have continued until August 2023.

“We are pleased to have secured these admissions by Qantas that it misled its customers, and its agreement that a very significant penalty is required as a result of this conduct,” said ACCC Chair Gina Cass-Gottlieb.

“The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law.” 

As well as the monetary compensation, Qantas has committed to reviewing its consumer compliance programs and implementing measures to prevent future occurrences. 

This includes promptly notifying customers of any cancellations and ceasing the sale of tickets for cancelled flights within 24 hours of decision-making.

Qantas Group CEO Vanessa Hudson expressed regret over the airline's past actions and emphasised its commitment to improving customer service and transparency. 

“We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again,” Hudson said.

Consumer advocacy group CHOICE has responded positively to the settlement, highlighting the impact on consumers and the broader implications for industry standards. 

“Qantas agreeing to pay $120 million dollars and admitting it misled consumers after ACCC court action is a significant result,” said Rosie Thomas, Director of Campaigns and Communications at CHOICE.

“This proposed settlement sends a very clear message to all airlines and travel service providers that misleading consumers about cancellations does not fly.”

As the Federal Court of Australia is yet to approve the penalty, further developments are anticipated. 

Meanwhile, Qantas will begin the remediation process, claiming it will facilitate a smooth and efficient compensation experience for affected customers.