Last August, Qantas, Australia's national airline, reported an underlying profit of AU$2.47 billion ($1.63b) for the fiscal year ending June 30, 2023, rebounding from losses totalling AU$7 billion ($4.62b) over the preceding three years. Despite this positive financial outcome, the company faced immediate challenges. Alan Joyce, the long-serving CEO, was swiftly replaced, and the Australian Competition and Consumer Commission (ACCC) initiated legal proceedings against Qantas, alleging the sale of tickets for flights the airline knew were cancelled.
By J Prakash
Following extensive negotiations, the Qantas Group announced a settlement with the ACCC to address the flight cancellation issue. As part of this agreement, Qantas committed to paying AU$20 million ($13.2m) in remediation to affected passengers and an AU$100 million ($66m) civil penalty, pending approval by the Federal Court of Australia.
This development stands in stark contrast to Qantas's earlier defence, wherein it acknowledged errors but argued that the ACCC's allegations disregarded the inherent uncertainties of the aviation industry. Qantas emphasized its efforts to provide affected customers with alternative flight options or refunds, refuting claims of 'fee for no service.'
Vanessa Hudson, CEO of Qantas Group, characterized the settlement as a pivotal step in rebuilding trust in the airline, acknowledging past shortcomings and customer dissatisfaction. The ACCC's accusations cantered on Qantas's purported false advertising of more than 8,000 flights that had been cancelled but remained available for purchase, potentially exposing the airline to significant financial penalties.
Under the terms of the settlement, over 86,000 customers who booked flights two or more days after the cancellation decision will receive compensation. Domestic and trans-Tasman flight passengers will be reimbursed AU$225 ($149), while international flight passengers will receive AU$450 ($297), in addition to any previously offered refunds or alternative arrangements.
The majority of affected customers were booked on domestic or trans-Tasman flights, with a significant portion receiving alternative flight options close to the original departure times. Qantas assured the compensation process would be facilitated through a dedicated online portal managed by Deloitte and subjected to independent auditing. Impacted customers will receive detailed instructions via email on how to claim compensation in the coming month.
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