ACCC action re cancelled Qantas flights

[RooFlyer]

Just read a piece in the Weekend Oz hardcopy by John Durie. Also on-line. Explains the reasoning for the particular course of action taken by ACCC against Qantas and some timings.

The ACCC chose to use its consumer law powers against Qantas rather than a criminal case in pursuit of speed to trial and hopefully a $250m-plus penalty if successful as a deterrence to other companies.

The reason was to bring the case as quickly as possible to counter alleged activity that has already reaped dividends, given Qantas has dropped the deadline for unused ticket claims.

If past practice is any guide, Qantas would have known about the intended action for the past few weeks, but a flurry of initial section 155 discovery notices focused primarily on the Covid fight closures, not the subsequent company action that is the focus of the coming action.

Given the heinous allegations against Qantas, that it sold tickets on flights it knew would not happen, the ACCC could have repeated the 2004 criminal case against Chubb Security for similar alleged behaviour.

Criminal cases are handled “outside” by the Director of Public Prosecutions.

 

[oz_mark]

Another statement from Qantas. https://www.qantasnewsroom.com.au/featured/qantas-statement-on-accc-proceedings/

Qantas continues to review the allegations made by the ACCC and will have more to say once we’ve had that opportunity.

Understandably, these allegations have caused significant concern among our customers, our people and the general community. We want to address those allegations as best we can without cutting across the legal process we are now involved in, which follows an ACCC investigation with which we fully co-operated.

The period of time that the ACCC’s claims relate to, in mid-2022, was one of well-publicised upheaval and uncertainty across the aviation industry, as Qantas struggled to restart post-COVID. We openly acknowledge that our service standards fell well short and we sincerely apologise. We have worked hard to fix them since and that work continues.

Some commentary has suggested that Qantas was engaged in charging a ‘fee for no service’ due to cancelled flights over this period. Our longstanding practice is that when a flight is cancelled, customers are offered an alternative flight as close as possible to their original departure time, or a refund.

The ACCC’s allegations come at a time when Qantas’ reputation has already been hit hard on several fronts. We want the community to know that we hear and understand their disappointment. We know that the only way to fix it is by delivering consistently. We know it will take time to repair. And we are absolutely determined to do that.

To the 25,000 people who make up the Qantas Group, we say thank you. Every day, you are focused on carrying customers safely to their destination and your professionalism in doing so is superb.

The definitely haven't come out swinging like they usually do

 

[Peasant]

Uncharacteristically contrite indeed.

It almost reads like the board has released this without going through the normal management spin cycle.

 

[eminere]

Does evidence of contrition factor into penalty considerations?

 

[Quickstatus]

Another statement from Qantas.

"We know that the only way to fix it is by delivering consistently"

Delivering what consistently? Does not sound like anything insightful.

 

[RooFlyer]

It almost reads like the board has released this without going through the normal management spin cycle.

Possibly, but read this para again:

Some commentary has suggested that Qantas was engaged in charging a ‘fee for no service’ due to cancelled flights over this period. Our longstanding practice is that when a flight is cancelled, customers are offered an alternative flight as close as possible to their original departure time, or a refund.

First sentence: No, its not 'commentary', the ACCC has taken you to Federal Court over it.
Second sentence: Isn't actually related to the first. First one is about charging for flights that have already been cancelled; second one is offering a substitute when the flight is cancelled. But it sounds as if the second has addressed the first.

Much of the rest is just 'boo-hoo, poor us' and deflecting from the actions of the management to the effects on their staff.

Better spin than my washing machine.

 

[FlyingKangaroo]

Better spin than my washing machine.

Agree - that's been drafted, reviewed and tweaked multiple times by legal, comms, et al. The tone may initially seem more contrite than usual but I read it more as deliberately nonchalant in an effort to minimise the seriousness of it all.

 

[straitman]

Agree - that's been drafted, reviewed and tweaked multiple times by legal, comms, et al. The tone may initially seem more contrite than usual but I read it more as deliberately nonchalant in an effort to minimise the seriousness of it all.

If your logic is correct I got it wrong as I believe many others will also.

 

[TheRealTMA]

Possibly, but read this para again:

Some commentary has suggested that Qantas was engaged in charging a ‘fee for no service’ due to cancelled flights over this period. Our longstanding practice is that when a flight is cancelled, customers are offered an alternative flight as close as possible to their original departure time, or a refund.

First sentence: No, its not 'commentary', the ACCC has taken you to Federal Court over it.
Second sentence: Isn't actually related to the first. First one is about charging for flights that have already been cancelled; second one is offering a substitute when the flight is cancelled. But it sounds as if the second has addressed the first.

Much of the rest is just 'boo-hoo, poor us' and deflecting from the actions of the management to the effects on their staff.

Better spin than my washing machine.

That’s what you get when you use ChatGPT to write press releases rather than employing humans.

 

[straitman]

That’s what you get when you use ChatGPT to write press releases rather than employing humans.

Not sure whether to laugh or cry at your comment?

 

[Must...Fly!]

Another statement from Qantas. https://www.qantasnewsroom.com.au/featured/qantas-statement-on-accc-proceedings/



The definitely haven't come out swinging like they usually do

No, but they're walking a tightrope on more than a couple of fronts at the moment. More antagonistic commentary especially with pending court action for multiple cases which will just invite more coverage from media is not what they need right now.

 

[RooFlyer]

Some investigation in the FinReview today in respect of the timing of ACCC investigative notices to Qantas, and when the then CEO sold 90% of his shareholding.

Qantas approved Joyce share sale five weeks after ACCC demand notice

Qantas allowed its chief executive Alan Joyce to sell $17 million in shares despite receiving a detailed demand for information as part of the competition regulator’s investigation into whether the airline inappropriately sold thousands of flight tickets.

AFR Weekend has confirmed that the Australian Competition and Consumer Commission sent the airline compulsory information notices – which require companies to hand over documents – on April 26. That was the second such notice sent, with the first given to Qantas on September 14 last year in the early stages of the investigation.

Michael Corrigan, a partner at Clayton Utz specialising in competition law, said the “threshold to issue the notices is the ACCC has to have a view that there may be a breach of the act”. Mr Corrigan, who was not speaking specifically about Qantas, said the receipt of a notice was “a significant step and a company gets to know it is reasonably serious”.

Presumably the company formed the view that, even in the ACCC launched proceedings (and they wouldn't have known then if they were criminal or civil - it turned out to be civil, for reasons given in a previous post), then any outcome wouldn't be material in the eyes of the market and so the permission was given to the CEO to sell.

Big call, and not a good look.

 

[encryptededdy]

New AFR Article on Qantas' filing with the federal court in response to the ACCC: Qantas says it ‘does its best’, no guarantees flights will take off

In a statement on Monday, Qantas said it was unable to remove flights from sale even after they had been cancelled internally “while also providing impacted customers with alternative flights” due to “system limitations” and because of the large number of flights involved.

It's ridiculous, but knowing the state of Qantas IT I can totally believe it (surely they can just zero out the flights though???).

And of course there's this great defence...

“The ‘service’ Qantas relevantly offers is a bundle of contractual rights, which are consistent with Qantas’ promise to do its best to get consumers where they want to be on time,” the airline said.

“That bundle of rights includes alternative options to which consumers become entitled in respect of cancelled flights, but does not include any promise to provide a ‘particular flight’ or to operate to a particular schedule.”

 

[Must...Fly!]

It's ridiculous, but knowing the state of Qantas IT I can totally believe it (surely they can just zero out the flights though???).

Definitely
That might require manual intervention which is how they're getting around this (I suspect) spurious claim.

 

[anat0l]

New AFR Article on Qantas' filing with the federal court in response to the ACCC: Qantas says it ‘does its best’, no guarantees flights will take off


It's ridiculous, but knowing the state of Qantas IT I can totally believe it (surely they can just zero out the flights though???).

And of course there's this great defence...

Is it at this point when the ACCC says, "We don't care - you don't get to weasel out of it. Either you provide the service as sold or you don't promote / sell it in the first place, or you can all go to jail."

Your best isn't good enough when it is illegal, immoral and/or unethical.

I suppose this incident has given ACCC the leverage it needs to wield a very powerful and sharp axe that it needed to have done so for a very long time. It won't matter if it appears that only Qantas is being held to account instead of all airlines.

 

[Mwenenzi]

New AFR Article on Qantas' filing with the federal court in response to the ACCC: Qantas says it ‘does its best’, no guarantees flights will take off

QF newsroom

https://www.qantasnewsroom.com.au/media-releases/qantas-update-on-accc-claims/

 

[kangarooflyer88]

QF newsroom

https://www.qantasnewsroom.com.au/media-releases/qantas-update-on-accc-claims/

Thanks for sharing, and a very interesting blurb from the press release (emphasis added):

Qantas did not delay communicating with our passengers for commercial gain. Nor did we cancel flights to protect slots, particularly given slot waivers were in place at most airports during that time. The primary reasons for the delay were:

• giving our teams time to establish alternative travel options for customers during a period of
  massive upheaval;
• avoiding further blowouts in call centre wait times; and
• in the case of longer delays, some human error.

So Qantas cancelled flights they never intended on making and yet kept selling those flights because to do otherwise would result in call centre wait times increasing substantially? Makes a whole of sense to me!

Another interesting bit from the FAQ:

Why were these cancelled flights left on sale? Was it for financial gain?

Due to system limitations and the sheer number of flights involved, we couldn’t remove these flights from sale automatically while also providing impacted customers with alternative flights. Given these flights were being cancelled well in advance of travel, we wanted to offer our customers alternatives rather than the uncertainty and frustration that would have existed if we had simply pushed through the cancellation in our system before we were able to offer alternative flights to get them to their destination. While managing this is not a problem in ‘normal times’, the sheer scale of the changes we were dealing with during this period meant that some flights remained on sale, as the ACCC case flags, for 48 hours or more after they were cancelled.

So they're saying it is too difficult to zero out all the inventory for a flight?

Another tidbit from the FAQ:

Why was this such a problem for Qantas but not for other airlines?

Virtually every airline in the world experienced various challenges while rebuilding their operations post-COVID.

Qantas was the only Australian-based airline flying internationally at that time, and the level of uncertainty and upheaval was greatest on international routes.

That is factually incorrect. There were other Australian airlines operating internationally during that time. How do I know? I flew JetStar internationally to Honolulu, unless of course Qantas deems Hawaii a domestic destination (which I suppose is the case if you have Global Entry but technically Australians don't qualify for that one).


-RooFlyer88

 

[encryptededdy]

QF newsroom

https://www.qantasnewsroom.com.au/media-releases/qantas-update-on-accc-claims/

I think they have a decent FAQ there, but I wonder how accurate their claim about "people who paid for a flight were given a flight, or a refund" is.

In theory, yes - if Qantas cancels your flight you're eligible for a rebooking or a refund. But in practice, especially in the first half of 2022 where this is concerned, could you actually get a rebooking or a refund easily? I can say almost for certain that affected passengers would've had issues with Qantas IT not allowing a rebooking or refund, or poor call centres telling customers the wrong thing just to get them off the line.

I personally had gotten a refund for at least 1 or 2 cancelled Qantas flights in that time, and at least once the website didn't let me cancel for a refund, so I had to call up and argue with the agent to convince them that I was due a refund. If I didn't know better, then I would've probably taken a credit instead (as the agent had insisted).

So Qantas cancelled flights they never intended on making and yet kept selling those flights because to do otherwise would result in call centre wait times increasing substantially? Makes a whole of sense to me!

This is addressed later in the press release. They state that their system doesn't allow them to cancel the flights without also providing impacted customers with alternate flights at the same time. However, they didn't have enough staff to prepare the alternate flights immediately.

They also note that they didn't want to tell customers their flights were cancelled without having alternate flights available yet, as that would generate more calls of customers asking to be rebooked (fair enough).

Of course in the end it's their own IT / human resourcing failures that lead to this, but given the limitations of their system I can understand why they worked the way they did.

 

[Axe_L_Thief]

This "we don't sell tickets on a particular flight, just a bundle of rights" defense is terrible.

I could accept that if they didn't charge you for a particular flight and just put a daily price, and you indicated your preferred time on that day.

 

[kangarooflyer88]

I think they have a decent FAQ there, but I wonder how accurate their claim about "people who paid for a flight were given a flight, or a refund" is.

In theory, yes - if Qantas cancels your flight you're eligible for a rebooking or a refund. But in practice, especially in the first half of 2022 where this is concerned, could you actually get a rebooking or a refund easily?

A big issue is that Qantas' own policies limit rebooking options. In particular, contractually they only need to put you on the next available service they operate. Whilst that might be acceptable if you are travelling from say Sydney to Melbourne, it's not gonna do you much good if you're stranded in Seoul or Dallas where you may have to wait many days to get put on a new flight. What is needed here isn't necessarily action by the ACCC on this front (although it certainly is welcome), but rather a passenger bill of rights that forces the airlines to put you on the next available flight, even if that flight is not operated by them. This is precisely what they do in Canada with the APPR when delays exceed 9 hours.

I personally had gotten a refund for at least 1 or 2 cancelled Qantas flights in that time, and at least once the website didn't let me cancel for a refund, so I had to call up and argue with the agent to convince them that I was due a refund. If I didn't know better, then I would've probably taken a credit instead (as the agent had insisted).

This isn't just a Qantas thing by the way, every airline was pulling this stunt in large part hoping that the customer is tricked into accepting the credit. What they are doing may not be illegal in many jurisdictions but it is immoral. This is one reason why in the EU, when a flight gets cancelled the airlines are obligated to tell you what your rights are.

This is addressed later in the press release. They state that their system doesn't allow them to cancel the flights without also providing impacted customers with alternate flights at the same time. However, they didn't have enough staff to prepare the alternate flights immediately.

I'm not suggesting they cancel any flights. They simply need to go into their system and zero out the inventory (i.e. mark the number of seats available for sale in Economy as 0, Business as 0 and so forth). Hence the flight will still be in the system but it will be unbookable for customers. This by the way, is a practice many airlines including Qantas do during normal times.

They also note that they didn't want to tell customers their flights were cancelled without having alternate flights available yet, as that would generate more calls of customers asking to be rebooked (fair enough).

A big issue is IT. Why is it that on many other airlines rebooking is done either automatically or there is an option for the customer to select a new flight online. In particular, when Air Canada cancelled my flight from LA to Seoul, I could go online and choose any flight operated by them or any of their partners. And this by the way was on a complex multi-city itinerary. Much like wifi onboard international flights, Qantas has again proven itself behind the times.

This "we don't sell tickets on a particular flight, just a bundle of rights" defense is terrible.

I could accept that if they didn't charge you for a particular flight and just put a daily price, and you indicated your preferred time on that day.

If this defence was reasonable, then a passenger could go up to an airline and say, "we don't take particular flights, we just have an agreement that we'll be travelling sometime" when they can't take a particular flight. The fact of the matter is, there is a reasonable expectation that when you book a flight for a specific time, that the flight will go ahead as scheduled. Yes delays and cancellations occur but it is should be the exception not the expectation. And when you systematically cancels thousands of flights, which Qantas admits to, then aren't you in some way knowingly misleading consumers by making a false representation? I'm not a lawyer but I suspect that this is a breach of common law.

-RooFlyer88