Qantas Reaches Settlement with ACCC over Cancelled Flights
Qantas has reached an agreement with the Australian Competition and Consumer Commission (ACCC) to settle a lawsuit regarding the sale of seats on flights that had already been cancelled. This settlement includes a remediation program for affected passengers, a $100 million civil penalty, and an admission of misleading consumers.
Qantas will institute a remediation program for affected passengers, with payments ranging from $225 for domestic customers to $450 for international customers. These payments are expected to total around $20 million and are in addition to any remedies already offered by Qantas, such as alternative flights or refunds.
Subject to the approval of the Federal Court of Australia, Qantas will also pay a $100 million civil penalty to the federal government for breaching the Australian Consumer Law. This penalty is considered significant, but some legal experts believe it could have been larger given the inconvenience and loss incurred by many customers.
As part of the settlement, Qantas has admitted to misleading consumers by advertising tickets for tens of thousands of flights it had already decided to cancel and by cancelling thousands more flights without promptly telling ticketholders. The ACCC chair described the airline's conduct as "egregious and unacceptable."
Consumer groups have expressed concerns that the current framework for airline consumer protection in Australia is inadequate. They argue that customers should have a clear legal entitlement to compensation for cancelled flights and that the government needs to take action to ensure this.
Qantas intends to commence the remediation program in advance of the court approval process. The money for the fine and remediation is expected to be paid out next financial year, after June 30. The Federal Court will still need to approve the settlement amount.