The Australian Competition and Consumer Commission (ACCC) has commenced Federal Court legal action against Qantas (QF, Sydney Kingsford Smith), alleging the airline sold tickets on flights it had already cancelled.

The allegations are that Qantas sold passengers tickets on more than 8,000 flights cancelled flights between May and July 2022. The ACCC alleges that Qantas continued selling tickets for an average period of two weeks after cancelling flights. However, in one case, it sold tickets on a flight for 47 days after cancelling that flight.

The ACCC further alleges that it took Qantas an average of 18 days to inform passengers of the cancelled flights over this period. In one case, the airline took 48 days to tell passengers of a cancellation.

The ACCC's investigation began after what was termed a "mass revolt" by impacted passengers. According to the competition agency, they receive more complaints about Qantas than any other Australian business. Separately, a class action is underway against the airline over its refund practices.

As part of its investigation, the ACCC served compulsory information notices on Qantas, later finding the airline engaged in "false, misleading or deceptive conduct.” The ACCC says the behaviour constitutes thousands of breaches of Australian Consumer Law.

According to the ACCC, Qantas cancelled almost one in four flights over May - July 2022, or 15,000 out of 66,000 scheduled flights. Citing a specific flight, QF73 slated to operate between Sydney and San Francisco on July 29, 2022, the ACCC says Qantas sold 21 tickets over 40 days after cancelling the flight. In many of the examples listed, Qantas only stopped ticket sales one day before notifying passengers.

While the ACCC alleges Qantas cancelled many of the flights for reasons within their control, such as network optimisation, route withdrawals, or retention of slots at certain airports, ACCC Chairwoman Gina Cass-Gottlieb says the airline is not being prosecuted because it cancelled the flights, but because of its conduct after the cancellations.

In a statement, Qantas said it took the allegations seriously. "We have a longstanding approach to managing cancellations for flights, with a focus on providing customers with rebooking options or refunds. It’s a process that is consistent with common practice at many other airlines," the statement read. "It’s important to note that the period examined by the ACCC between May and July 2022 was a time of unprecedented upheaval for the entire airline industry. We will examine the details of the ACCC’s allegations and respond to them in full in court."

Qantas's corporate behaviour is facing mounting scrutiny in Australia. The airline group recently declared a record USD1.74 billion Australian dollar (USD1.13 billion) FY2023 net profit, but its fast and loose attitude towards passengers during and after the pandemic is resulting in a growing backlash towards the airline and outgoing CEO, Alan Joyce.

The ACCC's action ends a torrid week for the airline, which began with Joyce fronting a Government Senate Select Committee in Melbourne on August 28, where he faced a highly publicised grilling on the airline's refund practices, cost of air fares, and growing outrage about Qantas's role in a political decision to block Qatar Airways (QR, Doha Hamad International) from securing additional capacity to certain Australian airports.

In the wake of Joyce's committee appearance, it has emerged the Qantas Group has under-reported refunds owed to passengers from cancelled flights during and after the pandemic by around AUD100 million (USD65 million). Within hours of the news breaking of the ACCC action, Joyce announced that a December deadline to use or lose credits was dropped, and there was now no expiry date. By imposing the deadline, the Qantas Group had stood to trouser around AUD500 million (USD324 million) in unclaimed credits, a move one prominent Qantas critic called "kleptomania at scale."

Cass-Gottlieb told Australia-based media that there was no good reason why Qantas did not communicate the cancellations promptly. The maximum penalties for each breach of the Australian Consumer Law before November 9, 2022, is the greater of AUD10 million (USD6.5 million), three times the total benefits that have been obtained and are reasonably attributable or, if the total value of the benefits cannot be determined, 10% of the entity's annual turnover.

"The action) will technically relate to multiple breaches on thousands of flights," said Cass-Gottlieb, adding that she hoped the fines imposed would set a new record for the offences.