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Qantas PR campaign backfires

Qantas (ASX:QAN) shares continued to slide on Monday, as the airline’s attempts to launch a PR campaign resulted in an unexpected and embarrassing apology.

The shares registered a 3% decline on Monday, exacerbating the month-long loss to 11%. This downturn was triggered by a slew of negative publicity surrounding the airline, including issues related to competition, claims from the Australian Competition and Consumer Commission (ACCC), refunds, and a public relations campaign orchestrated by CEO Allan Joyce before his scheduled departure at the November Annual General Meeting (AGM).

In response to the ACCC’s allegations, Qantas issued a statement on Monday indicating its willingness to review the claims. The airline expressed an understanding of the “significant concern” prevalent within the community.

The ACCC had accused the airline of participating in a “fee for no service” scheme in 2022 by selling tickets for flights that had already been canceled.

Qantas, in a statement presented to the Australian Securities Exchange (ASX), explained that it had a long-standing practice to aid consumers in cases of service disruptions. According to Qantas, their practice involves offering customers an alternative flight closely aligned with their original departure time or providing a refund in the event of flight cancellations.

The company asserted, “Some commentary suggested that Qantas was engaged in charging a ‘fee for no service’ due to cancelled flights over this period.”

Moreover, Qantas acknowledged that the ACCC’s allegations had generated significant apprehension among its customers. The airline aimed to address these claims while adhering to the ongoing legal process that followed the ACCC’s investigation, to which Qantas had cooperated fully.

Qantas disclosed that the time frame in question, the middle of 2022, witnessed notable upheaval and uncertainty across the aviation industry as it grappled with resuming operations post-COVID. In light of this, Qantas openly acknowledged shortcomings in its service standards and offered a sincere apology. The company emphasized its efforts to rectify the situation since then and underscored its commitment to ongoing improvements.

Additionally, Qantas recognized that the ACCC’s actions occurred amidst a period of damage to the brand’s reputation. The company conveyed a desire to address the community’s disappointment, recognizing that the path to restoration lies in delivering consistent service, albeit acknowledging that repairing the brand’s image would require time and sustained effort.

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