Fines could reach $250 million
The Australian Competition and Consumer Commission (ACCC) announced last week that it had filed a lawsuit against Qantas for engaging in "false, misleading or deceptive conduct".
The ACCC alleges Qantas continued to sell tickets for more than 8,000 cancelled flights scheduled to depart between May and July last year. The airline continued to sell tickets for weeks and in some cases up to 47 days after the flights were cancelled.
For example, Qantas sold 21 tickets for QF73 from Sydney, Australia to San Francisco, US scheduled to depart on 28 July 2023 after the airline cancelled the flight, with the last ticket sold 40 days after the cancellation.
Qantas Airlines, also known as The Flying Kangaroo, is facing a serious crisis.
The watchdog also accused Qantas of failing to notify ticket holders on another 10,000 flights that they had been cancelled for up to 18 days, and in some cases up to 48 days...
In addition, the ACCC alleges Qantas continued to sell tickets for about 70% of flights that were cancelled for two or more days.
ACCC Chair Gina Cass-Gottlieb said the highest fine to date for breaches of Australian consumer law was $125 million against Volkswagen, a record fine for such conduct. However, she believes that a fine of double that imposed on Qantas would be appropriate. Specifically, the ACCC is seeking to fine the airline more than $250 million, according to news.com.au.
The airline admitted that the period under consideration by the ACCC was a time of "unprecedented upheaval for the entire aviation industry" due to the post-pandemic pandemic, industry-wide staff shortages, fleet disruptions...
Qantas has issued a profuse apology to customers over its "wrongful, misleading and deceptive conduct" after being accused of selling tickets for "ghost flights".
However, the airline has hinted that it may fight the allegations, insisting that offering passengers on cancelled flights an alternative service or refund is "longstanding practice" and that this was the case.
The crisis is not over yet.
In a statement released earlier this week, Qantas admitted its service standards had fallen short of expectations recently. "We openly acknowledge that our service standards have fallen short and we sincerely apologise," a spokesperson said.
Airline CEO must leave
What’s more, a Senate committee hearing last week revealed that Qantas is holding $470 million in credit from passengers who canceled flights due to Covid-19. Qantas said it would make efforts to contact passengers and clear the “debt” by the end of the year.
Amid the crisis, Qantas Group CEO Alan Joyce unexpectedly announced his resignation and that CFO Vanessa Hudson would take over. Mr Joyce had worked at Qantas for 22 years, including 15 as CEO of the airline.
The early departure of Qantas’s chief executive is causing a backlash, with the airline’s share price swinging when markets opened on Tuesday morning. Qantas opened lower at $5.64, its lowest level since early October last year, before rising 1.6% to $5.74. The share price has since fallen to $5.66.
However, in June, Mr Joyce sold most of the 2.5 million Qantas shares he had accumulated since becoming chief executive in 2012 when they were trading at $6.74, leaving him with just 229,000 shares in the company.
Australian media also revealed Mr Joyce retired to a $20 million-plus apartment in The Rocks, central Sydney, with world- class views of the Sydney Harbour Bridge and Sydney Opera House.
Airlines in turmoil due to thousands of "ghost flights"
The airline's internal affairs were also troubled. Pilot Richard de Crespigny, famous for successfully landing QF32 in Singapore after one of its engines failed, commented on Alan Joyce's sudden resignation.
"It's the downfall of a brand that is based on trust. Airlines live and die on trust, which is competence, credibility, vision, values and especially care," Mr. de Crespigny said in an interview with Australian television, criticizing airline leaders for enjoying too many perks such as salary increases during the pandemic...
Labor senator Tony Sheldon, former national secretary of the Transport Workers Union and a member of the upper house who questioned Mr Joyce last week, has issued a statement saying the company's chairman, Richard Goyder, will be next to go.
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