Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), has taken legal action against Qantas Airways, alleging that the airline sold tickets to thousands of flights that had been canceled between May and July 2022 without informing customers. The ACCC is now seeking a substantial fine, potentially amounting to hundreds of millions of dollars, to discourage such behavior.
Qantas, in response, has stated that it will review the allegations and address them in court, emphasizing that the period in question coincided with significant disruptions in the airline industry due to the pandemic.
Since the reopening of Australia’s borders in late 2021, Qantas has faced a barrage of complaints related to flight cancellations and lost luggage, primarily attributed to staffing shortages. ACCC Chair Gina Cass-Gottlieb emphasized that the proposed penalty aims to convey that such actions should not be considered a mere cost of doing business but rather serve as a deterrent against similar conduct in the future. Under Australian consumer laws, Qantas could face a maximum penalty of 10% of its annual turnover, which stood at A$19.8 billion in the year ending June. This legal action has negatively impacted Qantas’s stock, with shares dropping nearly 2% to A$5.83, following a 3.81% decrease the day before, marking the lowest price since November 22.
In summary, the ACCC has sued Qantas Airways for allegedly selling tickets to thousands of flights that were canceled without informing customers, seeking a substantial fine to discourage such actions. Qantas has defended itself, citing the unique challenges faced by the airline industry during the examined period. The legal proceedings have led to a decline in Qantas’s stock price, underscoring the significance of the case.
(Source: Renju Jose | Miral Fahmy | Reuters)
