The Australian Competition and Consumer Commission (ACCC) has launched legal proceedings against Qantas after having found in an investigation that the airline continued to sell tickets for flights it had already cancelled.
Following over 2 600 customer complaints in 2022, of which half related to cancellations, the ACCC is now suing Qantas for more than AUD250 million (R3,14bn), claiming it engaged in false, misleading or deceptive conduct by advertising tickets for more than 8 000 flights that it had already cancelled but not removed from sale, reports simpleflying.com.
ACCC Chair, Gina Cass-Gottlieb, has gone on record saying she would like to see the airline pay more than double the existing AUD125 million (R1,57bn) record penalty incurred by Volkswagen in 2019 for misleading customers about emissions.
The ACCC seeks penalties, injunctions, declarations and costs. “We are going to seek a penalty that will underline that this is not just to be a cost of doing business," Cass-Gottlieb told ABC radio on September 1.
"We consider that this should be a record penalty for this conduct."
The ACCC alleges that the 8 000 cancelled flights had been scheduled to depart between May and July 2022, and that Qantas kept selling tickets on its website for more than two weeks and, in some cases, up to 47 days after it had cancelled the flights.
Additionally, for 10 000 flights scheduled to depart during the same period, the airline did not notify ticketholders for up to 48 days that their flights had been cancelled.
The ACCC says the airline failed to update its ‘Manage Booking’ web page, which meant that ticketholders could not see the cancellation. The regulator also said that, for around 70% of cancelled flights, Qantas either continued to sell tickets for the flight on its website for two days or more after cancellation, or it delayed informing existing ticketholders for two days or more that their flight had been cancelled, or both.
What has emerged are allegations that Qantas’s covert reason for cancelling flights was to keep its take-off and landing slots at Sydney Airport safe. The competition watchdog now accuses the airline of “slot-hoarding”. The allegation follows Qantas executives’ denials of so-called ‘slot hoarding’ at two parliamentary hearings.
Critics claim that Qantas and its budget carrier Jetstar have been blocking competitors from intruding rival domestic services at Sydney Airport, by the strategy of scheduling domestic flights and then cancelling them. These critics, which include Sydney Airport, Rex Airlines and Bonza, indicated Qantas’s high cancellation rates out of Sydney, with an average of one in ten flights between Sydney and Melbourne being cancelled. Current rules allow an airline to retain its slot so long as it does not exceed a 20% cancellation threshold.
Nonetheless, announcing the results of the investigation last Thursday, August 31, the ACCC said: “We allege that Qantas made many of these cancellations for reasons that were within its control, such as network optimisation including in response to shifts in consumer demand, route withdrawals or retention of take-off and landing slots at certain airports.”
Now the ACCC is taking legal action against Qantas for its conduct after deciding to cancel the flights, but not for acting improperly in actually cancelling the flights. The ACCC confirmed to Guardian Australia that the alleged ‘cancellations done to retain slots’ involved Sydney Airport, where legislation limits the airport to 80 movements an hour.
The ACCC’s action has been welcomed by airport bodies in Australia.
Geoff Culbert, the CEO of Sydney Airport, told Guardian Australia the airport had been calling out this behaviour for six years. He said there was justification for an immediate forensic audit into cancellations and slot misuse, a beefed-up compliance regime, and an enforcement process that punished misbehaviour.
James Goodwin, CEO of the Australian Airports Association said: “Scheduled and co-ordinated cancellations not only affect airline customers but disrupt airport operations. At airports where slots are at a premium, this can have the effect of limiting other airlines from using those potential runway allocations.”
This incident follows further investigation into Qantas’s role in the rejection of Qatar Airways’ application to increase flight services to Australia.
