In a landmark ruling, Australia’s Federal Court has fined airline Qantas $100 million.
The reason: Qantas misled customers by continuing to sell tickets for canceled flights, also known as “ghost flights,” without providing timely notice to affected passengers. The Australian Competition and Consumer Commission (ACCC) announced the penalty on October 8, 2024, highlighting the importance of this ruling to protecting consumer rights in Australia.
Misleading practices and their consequences
The allegations against Qantas are serious. Between May 2022 and May 2024, the airline issued false or misleading information about flights and continued to sell tickets on routes that had already been canceled. In total, more than 86,000 customers on 70,543 flights were affected. Ticket sales for these canceled flights averaged 11 days after cancellation; in some cases even up to 62 days afterwards. These practices violate the Australian Consumer Law (ACL) and reflect poorly on the airline’s management and compliance standards.
ACCC Chair Gina Cass-Gottlieb commented on the penalty: “This is a significant penalty that sends a strong message to all businesses, large and small, that they will face serious consequences if they treat their customers . “misleading.” However, the financial consequences are only part of the problem. In addition to facing a fine, Qantas will also have to refund around $20 million to customers who were either booked on a canceled flight or were rebooked on a flight that had already been canceled.
Delayed information and customer dissatisfaction
The airline admitted that ticket holders were informed late about the cancellation of their flights. In many cases, flight details were still visible on the booking site for several days after cancellation, causing further confusion and inconvenience.
These deficiencies affected 883,997 customers and represent a significant loss of confidence for the airline. Passengers who booked domestic flights will receive compensation of $225 each, while compensation for international flights is $450.
Lack of compliance and necessary changes
The ACCC strongly criticized Qantas, noting that such a large and well-resourced company should have robust operational and compliance programs in place to prevent such incidents.
As a result, Qantas has updated its operations and flight planning systems to ensure such incidents do not occur again. This could be a step in the right direction to regain customer trust and increase transparency in operations.
Impact on the industry
The ruling against Qantas has far-reaching implications for the entire airline industry in Australia. It sends a clear signal to other airlines that misleading practices will not be tolerated and that consumer rights must be taken seriously.
Experts warn that this could result in a reassessment of compliance standards within the industry. Airlines must now ensure that their sales practices are transparent and fair so as not to jeopardize passenger trust.
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