October 8th 2024.
It has been revealed that Qantas, one of Australia's leading airlines, has been fined a whopping $100 million for deceiving its customers over several years. The Federal Court heard that senior managers within the company were aware of this deceptive practice to some extent. The Australian Competition and Consumer Commission (ACCC) took legal action against Qantas for their dishonest conduct in selling tickets for cancelled flights.
The court found that Qantas had been misleading and deceiving its customers by selling tickets for flights that had already been cancelled. What's more, they also delayed informing customers about the cancellations, causing inconvenience and uncertainty for the booked passengers. Justice Helen Rofe officially ordered the airline to pay the penalty, which was agreed upon by both parties in May.
The tickets in question were sold for flights cancelled between May 2021 and August 2023, affecting a staggering number of 86,597 customers on over 70,000 flights. Shockingly, Qantas continued to sell tickets for up to 62 days after deciding to cancel the flight, while it took them up to 67 days to inform booked customers. The ACCC barrister, Christopher Caleo, revealed that senior managers within the company were aware of various aspects of this issue, but no one had a complete understanding of the matter.
According to Caleo, Qantas was aware of the deficiencies in their systems, yet they persisted with this deceptive practice for an extended period of time, causing harm to a large number of consumers. As a result, Qantas was fined $70 million for selling tickets for cancelled flights, which the ACCC deemed to have caused the most harm. They were also fined an additional $30 million for their failure to promptly notify customers about the cancellations.
Given that Qantas is the largest airline in Australia, accounting for 38% of the market share, a substantial penalty was necessary to deter similar behavior from other companies. Caleo stressed that the penalty should serve as a warning to all companies, especially large ones, that violating consumer laws will not be tolerated. He added that it must be a significant enough amount to make an impact and not just a mere acceptable cost for the company.
During the court hearing, Qantas expressed remorse for their actions, with their barrister Ruth Higgins stating that they were sorry for engaging in such conduct. As part of their compensation, the airline also paid a total of $20 million to over 86,000 affected customers. Domestic customers received $225, while international customers were given $450.
Qantas has also taken steps to rectify the issue and prevent it from happening again. They have made changes to their systems and have agreed to notify customers about cancelled flights within 48 hours of the decision and stop selling tickets for those flights within 24 hours. This undertaking also applies to their subsidiary, Jetstar. Higgins emphasized that these changes prove Qantas' commitment to avoiding such incidents in the future.
The penalties faced by Qantas for their actions were significant, with a maximum fine of $4.98 billion to $7.58 billion. However, the airline's cooperation and efforts to make amends were taken into consideration, resulting in a $100 million penalty. The court's decision serves as a reminder to all companies to act ethically and keep their customers' best interests in mind.
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