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ACCC takes legal action against Qantas for breach of consumer rights over cancelled flights

The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings against Qantas (ASX:QAN) in the Federal Court, alleging violations of consumer protection laws related to its handling of cancelled flights and lack of communication with affected passengers.

According to the consumer and competition regulator, Qantas sold tickets on its website for over 8,000 domestic and international flights scheduled between May and July 2022, despite having already cancelled these flights. The ACCC claims that the airline continued selling tickets for an average of more than two weeks, and in some instances, for up to 47 days after cancellations occurred.

The ACCC further asserts that Qantas neglected to notify more than 10,000 ticketholders of flight cancellations during the same period. The average time between flight cancellations and notifying passengers was approximately 18 days, extending to 48 days in certain cases. The Commission alleges that Qantas failed to update its “Manage Booking” web page to reflect these cancellations.

This behavior affected a significant portion of flights cancelled by Qantas during the May to July 2022 timeframe. The ACCC claims that in around 70% of the cancelled flights, Qantas either continued selling tickets for two days or more after cancellation or delayed notifying ticketholders for two days or more, or both.

Gina Cass-Gottlieb, Chair of the ACCC, explained, “Qantas’ actions left customers with limited time to make alternative arrangements, potentially resulting in higher costs for alternative flights that passengers were unaware had been cancelled.”

The ACCC’s comprehensive investigation included engaging with affected consumers and issuing mandatory information notices to Qantas. Through meticulous data analysis by ACCC’s specialized data analysts, it was discovered that Qantas cancelled nearly 25% of flights between May and July 2022, with roughly 15,000 out of 66,000 domestic and international flights from various locations being cancelled.

The legal proceedings are related to over 10,000 of these cancelled flights.

Meanwhile, recent reports from Fairfax/Nine media suggest that Qantas has shifted its stance on Covid-related non-travel refunds. The airline reportedly plans to eliminate the expiry date on flight refunds for passengers whose travel plans were disrupted due to Covid-19 border closures. This change comes after mounting public and political pressure. The financial impact is substantial, with approximately $370 million involved at Qantas and an additional $100 million at Jetstar.

Previously, passengers were eligible for refunds until December 2023. Those with flight credits from the company still have until the end of this year to book a flight. The revised policy now enables customers who booked flights through travel agents to seek refunds. Jetstar flight credit holders will also have indefinite access to their credits.

This marks the fourth adjustment to Qantas’ Covid-19 refund and flight credit policy as the company attempts to manage its financial obligations to affected customers. Qantas is concurrently facing a class action lawsuit on behalf of passengers who contend they have not received adequate compensation for disruptions.

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