Qantas to pay $100m penalty over cancelled flights

Passengers affected by the national carrier’s advertisement of cancelled flights will pocket a couple of hundred dollars each after the Federal Court approved a $100 million penalty and $20 million remediation fee.

Editor’s note: This story first appeared on HR Leader’s sister brand, Lawyers Weekly.

Justice Helen Rofe signed off on the settlement agreement reached in May, which will see Qantas pay a pecuniary penalty of $100 million and compensate passengers up to the total sum of $20 million.

Appearing on behalf of the Australian Competition and Consumer Commission (ACCC), Christopher Caleo KC said the major airline has also given an undertaking to implement changes to its system “to ensure the contravening conduct does not occur in the future”.

This will include its subsidiary budget airline, Jetstar.

“Qantas has stated that as a large publicly listed company with significant financial resources, [the penalty] must send a clear signal to other companies in Australia that contraventions of the Australian Consumer Law (ACL) cannot be tolerated, and there are serious consequences for such contraventions,” Caleo said.

Between 21 May 2021 and 26 August 2023, Qantas advertised tickets for more than 8,000 flights and did not promptly notify existing ticketholders of a further 10,000 flights that they had been cancelled.

By doing so, the airline engaged in misleading or deceptive conduct, made false or misleading representations, and engaged in conduct that was liable to mislead the public in breach of the ACL.

Qantas will pay $225 to domestic ticketholders and $450 to international ticketholders, on top of any accommodations already made to them, including alternate flights and refunds.

ACCC chair Gina Cass-Gottlieb said she was pleased to not only secure an admission by Qantas but also come to an agreement “that a very significant penalty is required as a result of this conduct”.

Referring to that penalty, Caleo said it would not only deter others from contravening the ACL but would also send a message to other large corporations that it is not “a mere cost of doing business”.

However, the penalty was softened due to Qantas’ cooperation.

“Without that cooperation, the total sought by the commission would have been significantly higher,” Caleo said.

On behalf of Qantas, Dr Ruth Higgins SC said the airline was “sorry it engaged in conduct that is admitted in this proceeding”.

She added Qantas has since “designed, implemented and committed to whole-of-business improvements concerning cancellations”.

The ACCC has warned affected ticketholders that scammers have used a media release to trick them into making payments. They advised hanging up immediately and reporting any payments made.