Qantas has been ordered by the Federal Court to pay $100 million in penalties for misleading consumers in a successful case lodged by the ACCC against Australia's largest airline.

The airline was found guilty of offering and selling tickets for flights it had already decided to cancel, and failing to promptly inform existing ticket holders of its decision.

Qantas admitted it had contravened the Australian Consumer Law (ACL) and agreed to make joint submissions with the ACCC to the Court that penalties of $100 million were appropriate. In addition to these penalties, on 5 May 2024, Qantas gave an undertaking to the ACCC that it would pay about $20 million to consumers who purchased tickets on flights that Qantas had already decided to cancel. These payments are on top of any remedies these consumers already received from Qantas, such as alternative flights or refunds.

Qantas admitted it breached the Australian Consumer Law by engaging in misleading or deceptive conduct, making false or misleading representations and engaging in conduct liable to mislead the public about more than 82,000 flights scheduled to depart between May 2022 and May 2024. Approximately 880,000 consumers were affected by Qantas' conduct.

ACCC Chair Gina Cass-Gottlieb said, "This is a substantial penalty, which sets a strong signal to all businesses, big or small, that they will face serious consequences if they mislead their customers.

"We all know the inconvenience of cancelled flights. When this happens, consumers need to know about the cancellation as soon as possible, so they can work out alternative arrangements which suit them."

Cass-Gottlieb also highlighted the impact on consumers. "Up to about 880,000 consumers were affected by Qantas' conduct. People had made plans, and may have spent money on other related purchases, relying on the fact that the flight would depart as advertised. And the delay in notifying them of the cancellation may have made it more stressful and costly to make alternative arrangements."

Qantas admitted senior managers knew cancelled flights were not immediately removed from sale; that some consumers booked tickets for flights that had already been cancelled; that existing ticket holders were not immediately notified; and that the 'Manage Booking' pages were not promptly updated when flights were cancelled. Qantas also admitted it benefited from the conduct by obtaining revenue from consumers who may have chosen a cheaper Qantas flight or a flight with another carrier had they known their chosen flight had already been cancelled. Qantas also benefited by retaining revenue from consumers who were less likely to change carrier when they were eventually notified their flight had been cancelled.

How Qantas breached the Australian Consumer Law

Qantas breached the law in two ways. First, it continued to offer and sell tickets for flights for two or more days after it had decided to cancel those flights. Second, Qantas continued to display flight details on the ‘Manage Booking’ page of existing ticketholders for two or more days after it had decided to cancel the relevant flight with no indication that Qantas had decided to cancel that flight. Qantas also did not otherwise notify consumers that their flight had been cancelled.

Qantas continued to offer tickets for sale to tens of thousands of domestic and international flights for two or more days after it had decided to cancel those flights and sold tickets to consumers on some of those flights. This affected: 70,543 flights (69,237 domestic and trans-Tasman flights, and 1,306 international flights); along with 86,597 consumers who made bookings on, or were re-accommodated to, a flight that had already been cancelled (81,238 of those consumers made a booking on a domestic or trans-Tasman flight and 5,359 made a booking on an international flight).

On average, tickets for these cancelled flights were offered for sale for about 11 days after cancellation, and in some cases, for up to 62 days after cancellation.The flying kangaroo also continued to display details for flights on the ‘Manage Booking’ page of ticketholders for two or more days after Qantas had decided to cancel the flight with no indication that Qantas had already decided to cancel the flight.

On average, it took Qantas about 11 days for ticketholders to be notified of the cancellation of their flight. In some cases, this took up to 67 days.

Qantas has contacted the majority of eligible consumers on or before 10 July 2024. Consumers have until 6 May 2025 to submit their claim for a payment through the Qantas Customer Remediation Program

“The ACCC urges all eligible consumers impacted by this conduct to submit their claims as soon as possible, so they can receive their payment,” Cass-Gottlieb said.

Qantas is required to make all payments to eligible consumers within 60 days of payment information being provided by the consumer (or a person on their behalf) and acceptance of this information by Qantas/Deloitte.

After the start of the proceedings, Qantas made changes to its operating and scheduling systems so that it is no longer engaging in the conduct.

“A large, well-resourced company like Qantas should have had strong operating and compliance programs in place that would have prevented these issues from arising. However, we are pleased that Qantas has made changes to its operating and scheduling, and has undertaken to amend its compliance programs,” Cass-Gottlieb said.

The ACCC acknowledges Qantas’ cooperation in resolving this proceeding at an early stage, and its undertaking to implement a remediation program ahead of the Court hearing to finalise this case.

The court also ordered Qantas to pay a contribution to the ACCC’s costs, by consent. The ACCC commenced its court action against Qantas on 31 August 2023, and Qantas agreed to make joint submissions in support of $100 million in penalties with the regulatory watchdog in May 2024.