Australian Regulator Fines Qantas Millions: The Australian Competition and Consumer Commission made history on Friday by threatening to punish Qantas Airways heavily. This unusual measure indicated that firms’ conduct will be scrutinized. This severe comment follows the Australian Competition and Consumer Commission (ACCC) suing the airline for selling tickets for canceled trips. People stated the airline offered tickets for canceled flights.
On Thursday, Qantas’ regulatory papers revealed that it violated consumer protection regulations by selling tickets for over 8,000 journeys from May to July 2022. It was surprising that the company didn’t notify customers of flight cancellations.
Qantas wrote carefully to explain that the ACCC was examining at a time when the airline industry worldwide was having several major issues. However, when questioned about the latest ACCC onslaught, the airline declined to comment.
After Australia’s international borders reopened in the second half of 2021, Qantas was criticized, complicating matters. Most airline complaints were about luggage going missing and planes being canceled at the last minute. Most problems began due to a lack of workers.
In response to these concerns, ACCC head Gina Cass-Gottlieb told ABC Radio that the Commission won’t deliver a “slap on the wrist.” Instead, it aspires to be a significant deterrent that changes the aviation industry’s ethics mindset. If it doesn’t fix the problem, Australian consumer legislation could cost Qantas 10% of its annual sales. Qantas’s fiscal year ending June 2021 revenue was estimated at A$19.8 billion.
The stock market plummeted Qantas shares after the negative news. Share prices plunged more than 2% to A$5.83 on Friday afternoon, matching the day before’s alarming 3.81% decline. Thursday was the airline’s lowest stock price since November 22. This was the lowest ever. This unnerved investors.
Cass-Gottlieb said they seek to penalise Qantas more than Volkswagen’s 2019 record A$125 million ($81 million) fine for consumer law infractions. When discussing the ACCC’s position, Cass-Gottlieb elaborated. She added that historical punishments have been weak. We’re considering a fine in the hundreds of millions, not just tens, and we’ll pay twice as much as Volkswagen.”
The ACCC’s alarming data added detail to the proceedings. The watchdog group discovered that Qantas sold tickets for canceled flights for an average of 16 days after they were canceled, often due to factors beyond management’s control. One particularly egregious scenario involves Sydney-San Francisco airplane tickets. Sales did not slow for 40 days after this vacation was put back.
To conclude, Qantas’ dispute with the Australian Competition and Consumer Commission (ACCC) highlights critical considerations concerning regulatory oversight and consumer protection. This is crucial for a company that has had unprecedented troubles in recent years.
Qantas’s assertion that it had to navigate a “labyrinthine maze of logistical and operational complexity” is not adequate to justify violating consumer protection laws, according to the ACCC. Qantas had to navigate a complex logistics and operations network.
This sticky circumstance highlights Qantas, the aviation sector, and the success of regulatory systems in other countries. The legal dispute in courtrooms will undoubtedly affect other areas. Businesses may have to rethink their standard operating procedures and put consumers first if regulatory agencies throughout the world feel more confident in enforcing fines that match corporate infractions.
Our Reader’s Queries
How much is Qantas getting sued for?
Qantas is facing a lawsuit for allegedly withholding over $1 billion in credits from cancelled flights. The airline has been accused of breaching consumer law by failing to provide refunds or allowing customers to use their credits for future bookings. The lawsuit has been filed by the Australian Competition and Consumer Commission (ACCC) and is seeking compensation for affected customers. This legal action highlights the importance of airlines adhering to consumer protection laws and providing fair treatment to their customers.
What is the fine for Qantas?
Qantas may face a massive $600 million penalty if the Australian Competition and Consumer Commission (ACCC) succeeds in its legal action against the airline. The consumer watchdog’s chair, Gina Cass-Gottlieb, has set this unprecedented amount as the target for the penalty.
What is Qantas accused of?
Qantas and Virgin, among other Australian airlines, have been accused of slot hoarding, which can have a significant impact on travelers. The Australian Competition & Consumer Commission (ACCC) recently alleged that Qantas had deliberately cancelled 15,000 flights to benefit financially. This practice can lead to reduced competition and higher prices for consumers, making it important for regulators to take action against slot hoarding.
What is the ACCC action against Qantas?
In August 2023, the ACCC filed a lawsuit in the Federal Court of Australia against Qantas. The allegations state that between May and July 2022, Qantas cancelled numerous flights and still sold and accepted payment for those flights.