ACCC action re cancelled Qantas flights

[MARTINE]

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.

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.

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.

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.


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

Certainly feels like a ‘bait’ and ‘switch’

 

[encryptededdy]

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.

Yeah, I mentioned this in my initial post of the AFR article. Qantas claims that for one reason or another this was not possible.

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.

I am certainly skeptical about their claim though. I do note that they say we couldn't remove them automatically. I guess they could've zeroed all the flights manually (but didn't have enough staff and/or bad processes to keep up with it) and this is creative wording in their press release.

 

[CMA222]

So QF do not want to cancel flights until they have alternative flights they can offer. So the rationale is sell flights they have cancelled and keep the suckers on the hook so they do not cancel and/or book with Virgin as an alternative. Commercial interest of QF trumps actually providing the customer with the service they thought they had contracted for. Situation normal.

 

[opusman]

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.

I think QF are taking a risk here. If their Contract of Carriage winds up being ruled unenforceable by the Federal Court it's going to open up a much bigger can of worms for them.

 

[kangarooflyer88]

Here's what I think the real FAQ for Qantas should've been had they been telling the truth:
Did Qantas sell ‘ghost flights’?
If by ghost flights you mean flights which we had no intention of operating, then we're guilty of that!

Why did Qantas cancel thousands of flights during the period the ACCC looked at?
Look, we needed the cash and people were so desperate to travel having been locked at home for so long, we figured, why not put some ghost flights on the market?! Overpromise and under-deliver, it's the Qantas way!

Why was there a delay in telling customers their flight was cancelled?
The longer we hold off on telling you your flight is cancelled, the longer we get to keep your hard earned money and the less time you get to spend looking for alternate flights that suit you (especially on competitors). After all, who would pay triple the fare they originally booked flying Virgin Australia when they are told 24 hours prior to departure their flight was cancelled and they were automatically rebooked on the next scheduled Qantas flight departing 2 weeks later!

Couldn’t you have told customers their flight was cancelled first, and then followed up with an alternative flight later?
We could have, but then customers would've looked elsewhere for flights which is un-Australian!

Why were these cancelled flights left on sale? Was it for financial gain?
You hit the nail on the head!

Why was this such a problem for Qantas but not for other airlines?
A couple of reasons. First there's no competition in the marketplace meaning you gotta fly with us (just ask Qatar). Second, there is a complete lack of consumer protection legislation in Australia when it comes to delayed or cancelled flights meaning you are completely at our mercy. Third, our IT systems are still running off punch-cards - can you believe it?

What’s changed to stop this happening again?
We will provide key stakeholders at the ACCC complimentary membership to the Chairman's Lounge.

-RooFlyer88

 

[XWu]

Ok I admit I am trying to teach ACCC legal team how to suck eggs here but I would have thought the basis of their claim would have been having some evidence of email correspondence between the lower drones to middle management or higher that goes like this:
”but madam/sir, there is no way we can find the staff or equipments to get them on line or ready to service these flights by these dates!”
”well, we think it will be ok, and we can always cancel them if we don’t “
that’s the smoking gun needed to nail QF if someone is to do the job properly.

and come on, not having the tech capability to organise refund? Even if the ACCC want to believe that, the public wouldn’t.

QF certainly have the ability to put in place emails with the specific booking itinerary number and offer the option of travel credit, why not refund? The travel credit didn’t materialise in a hurry even when you select that so why does anyone in QF think processing a refund is any faster or more difficult? Most pax will understand that the airline is going through a difficult time so sucking out cash from QF would make it end up going like Ansett with its cash flow. But hiding the refund option and making people wait hours to get to talk to someone in their call centre is cruel and malicious, when they knew the call centre is going to be the only contact they can get to QF

 

[Saab34]

This airline is hell bent on holding its line. They really really need a management turf out, and the next regime next to come in and say we got the everything wrong, and just listen to staff and customers, and move forward.

Deep down we all know if they could go back in time, many of these cost cutting decisions illegal or not, would still be made.

 

[RichardMEL]

imo the latest excuses/rationale brought out today are both a bit weird, and just impact even more on QF's poor mage.

From what I understand QF has claimed today that it doesn't sell tickets to particular flights but "a bundle of rights" to fly but also including "a;lternatives."

this is dangerous imo.

Now, everyone knows schedules aren't guaranteed - specially well in advance, but schedules usually firm up within 2-3 months out and changes post that should be rare (let's just put the controversial issue of flight consolidation to one side).

the problem is that if they push this "you don't buy a particular flight" (to a schedule) then that sends the message that QF might pull the rug out as it suis them and pull the "Well you bought a ticket from Melbourne to Sydney which is actually a bundle of rights to fly there.. sometime...." and that would reduce confidence in the carrier.

Of course the reality is that schedules involve far more than getting those pax from A to B at time X - there's aircraft, crews, freight etc etc etc and chances are that schedules will, in the main, endeavour to be kept for all these reasons..

I just think this defence is both a bit weak by the airline and can reduce confidence.

 

[justinbrett]

Geoffrey Thomas (Aviation expert) is pretty confident the ACCC's case will fail.

 

[jrfsp]

Surely the government’s’ has to recognize that having passenger protection laws would negate this issue, at least to a certain extent.

But those chairman’s lounge (and VA equiv.) memberships….

 

[_TheTraveller_]

Interesting position. I wonder why one bundle of rights cost more than another bundle given that they're all the same thing?

 

[UP4014]

From what I have worked out from an insider, not AFF The Insider though.

QF IT was putting up flights that were optimistic but in the plan, once they started being cancelled they tried to spread the cancellation load across the call centres to deal with of which only Hobart and Auckland had the knowledge/skill with others failing left right and centre and got out of control. Tucson would have dealt with it but QF in is wisdom decided they didn’t need to provide that level of customer service all the time and sent it to dustbin and engaged a really coughpy call centre they now wish they hadn’t chosen.

I think that’s why head of IT departed, could see what was coming with the investigation. Perhaps whomever recommend the current call centres should also face the axe as a contributing factor.

One dept mucks it up another dept covers it up.

Straight up incompetence rather than something malicious.

 

[kangarooflyer88]

An hilarious statement in the press release was their misuse of data:

For instance, in the examples of cancellations identified in the ACCC’s media release:

• 100 per cent of impacted domestic passengers were offered same-day flights departing prior to or within one hour after their scheduled departure time.
• 98 per cent of impacted international passengers were offered reaccommodation options on flights within a day of their scheduled departure date.
• In most cases, customers were rebooked on these alternative flights weeks or months ahead of when they were actually due to travel, allowing them to plan.

So they did an analysis on the 10 examples ACCC provided of Qantas' ghost flights, they found that 100% of the impacted flights were offered a new departure within an hour of their scheduled departure time. Colour me impressed. And 98% of the impacted international flights were offered a flight departing that day. I'm no math expert but how does that even work when you only have 10 examples to choose from? The other thing such analysis fails to take into account is their arrival time. After all, there is no point departing around the same time if you must connect through multiple cities and lose a day travelling (unless of course you are in it for the status credits).

This airline is hell bent on holding its line. They really really need a management turf out, and the next regime next to come in and say we got the everything wrong, and just listen to staff and customers, and move forward.

Deep down we all know if they could go back in time, many of these cost cutting decisions illegal or not, would still be made.

Qantas is deeply sorry... for being caught!

Geoffrey Thomas (Aviation expert) is pretty confident the ACCC's case will fail.

The case may fail. But at the very least it has dragged Qantas' image through the mud in the mind of customers and that in and of itself is enough to hopefully give them a pause and reconsider some of the actions they take going forward. For instance, I highly doubt Qantas would have offered all those bonus points or extra award flights availability had this case never come up. Whether they change their own policies when it comes to things like IRROPs remains to be seen.

Surely the government’s’ has to recognize that having passenger protection laws would negate this issue, at least to a certain extent.

It would likely have impacted this practice (although I haven't seen the EU, US DoT or other agencies go after Qantas...yet!), and I would be curious whether we saw the same type of ghost flights and delays/cancellations on flights from Europe (i.e. LHR) where strong consumer protection laws are in place. It would also be interesting to see whether sub-EU flights (which I define as flights QF operates that don't originate or end in the EU but which serve as a vital feed for service from Europe and thus eligible for EU261 in many cases) were delayed as much as regular international flights (i.e. to USA or Canada). If you place a large enough monetary penalty on an airline for last minute changes, then this type of systemic skull foolery won't happen. I mean having to pay $1000 per passenger for each cancelled flight would prove quite costly. On a fully loaded 787 that's $236,000. On a fully loaded Airbus 747M (A380) that works out to $484,000. Plus hotel and whatever costs on top. This would certainly force the scheduling departing to have a long think about how to schedule flights so as to not disappoint their customers and their bean counters.

-RooFlyer88

 

[encryptededdy]

One dept mucks it up another dept covers it up.

Yeah, I generally agree that this is the most plausible explanation. Is it possible that Qantas did this as a plan to hold onto customers money for longer? Yes. But it's more likely just the usual incompetence on their side (unfortunately).

Post automatically merged: Oct 30, 2023

And 98% of the impacted international flights were offered a flight departing that day. I'm no math expert but how does that even work when you only have 10 examples to choose from?

Because each flight has more than 1 passenger affected, and the press release says 98 per cent of impacted international passengers

 

[dylarr]

Tucson would have dealt with it

Just curious - what does Tucson mean in this context? I know QF used to operate a (now defunct) call centre in Tucson, AZ many moons ago but they still have operations or back office functions there?

 

[justinbrett]

Yeah, I generally agree that this is the most plausible explanation. Is it possible that Qantas did this as a plan to hold onto customers money for longer? Yes. But it's more likely just the usual incompetence on their side.

And that is what Geoffrey Thomas was saying, and why the court won't find against Qantas - certainly not for the 250 mil.

The case may fail. But at the very least it has dragged Qantas' image through the mud in the mind of customers and that in and of itself is enough to hopefully give them a pause and reconsider some of the actions they take going forward. For instance, I highly doubt Qantas would have offered all those bonus points or extra award flights availability had this case never come up. Whether they change their own policies when it comes to things like IRROPs remains to be seen.

ACCC may well have known they were always going to lose the case - the case in itself achieves their aims for the reason you mention.

But they'll end up paying QF's legal bills for it.

 

[anat0l]

This airline is hell bent on holding its line. They really really need a management turf out, and the next regime next to come in and say we got the everything wrong, and just listen to staff and customers, and move forward.

Deep down we all know if they could go back in time, many of these cost cutting decisions illegal or not, would still be made.

This is the part which amazes me. You've been caught with your pants down, so no one cares how you wash it. You might as well take an angle of contrition on this one, eat it and move on, because trying to go against the pub is going to get you killed (figuratively or literally).

Then again, we are used to Qantas and almost any other large company being clobbered in the PR sense but still coming up strong. Thank you capitalism...

Geoffrey Thomas (Aviation expert) is pretty confident the ACCC's case will fail.

The case may fail. But at the very least it has dragged Qantas' image through the mud in the mind of customers and that in and of itself is enough to hopefully give them a pause and reconsider some of the actions they take going forward. For instance, I highly doubt Qantas would have offered all those bonus points or extra award flights availability had this case never come up. Whether they change their own policies when it comes to things like IRROPs remains to be seen.

As said previously, they've been through the mud before (admittedly, maybe aside from the grounding, not this much mud) and came out squeaky clean. It would take something quite dramatic like the entire Qantas board being sent to prison (or otherwise disappearing), a significant number of shareholders throw in their shares and send the share price crashing to nothing, customers en masse cancelling their tickets (corporate customers ripping up contracts) or a significant portion of the Qantas workforce (and/or their contractors) going on indefinite strike before Qantas will be forced to do anything that will be seen as morally or ethically acceptable.

It's highly doubtful any of the aforementioned will happen, as it takes a whole lot of people a whole lot of guts that they don't have in order to effect. Also, these would be decisions that are not strongly grounded in economically sound reasons; these are probably more reputational or ethical decisions (along the lines of "we don't want to associate with them, because they're bad, not because they are too expensive). Given time, Qantas will still be on its feet and most of this will be forgotten. Most of us will either not use Qantas in principle (or unless it's a no-choice situation) or will only use Qantas in a purely exploitative relationship, not true loyalty (basically like being in a gaslighting abusive relationship).

In history, airlines around the world have had accidents which have killed people and culpability has been traced back to the airline. Many of them are still here today with a reputation as if it never happened. Garuda is just one example. Same goes for abuse of human rights (of passengers and/or staff). For big businesses, nothing seems to be a big enough tarnish to actually wound them to get their attention.

I'm surprised why the case will fail. The main reason why it might fail is because of lack of precedent and our country's inherent lack of appropriate punishment for white collar crime. The ACCC is a government organisation - doesn't it have punitive powers that are exclusive of the judiciary, let alone it could make recommendations to Parliament?



One thing that puzzles me and probably all of us why there is no such protection framework like EU261 in Australia yet. Is it a political decision or hotbed that no one wants to touch? It seems like some of the simplest legislation to make the case for and implement, and - if not at the moment - seems like it would have unanimous support or you would be hard pressed to work out why an MP would not support the idea. I don't care if all of them have CL membership and that's stopping them - if that truly influenced their decision then that's called corruption.

Mind, the next problem with introducing EU261 style protections is making sure that the airlines cough up in a timely matter when they get it wrong (because they will drag it out as long as they can before they pay up).

 

[kangarooflyer88]

And that is what Geoffrey Thomas was saying, and why the court won't find against Qantas - certainly not for the 250 mil.

ACCC may well have known they were always going to lose the case - the case in itself achieves their aims for the reason you mention.

But they'll end up paying QF's legal bills for it.

I'm not an expert on law here (amongst a number of things) but I do wonder for this type of case would the ACCC be entitled to legal discovery? In other words could they subpoena Qantas and others for records which could help prove their case? I think the case the ACCC has laid out is compelling and so far as I can tell, that was just with information that was publicly available. I would be surprised if there wasn't a smoking gun email or internal data that indicates the magnitude of the operation. For instance, whilst Qantas loves to boast that 98% of impacted passengers on the flights ACCC listed in their press release were adequately reaccomodated (if you consider a same day departure as being reaccomodated) what does the data look like systemwide? Was Qantas fortunate that the ACCC selected a couple of examples that looked favourably on them? Presumably Qantas does have records which not only indicate flights scheduled and cancelled but also how passengers were reaccomodated. Equally interesting would be to see of those customers who did not accept the reaccomodation by Qantas, how many received an actual refund versus a flight credit. IMHO it should be illegal for airlines to offer flight credits when they cancel flights on you. It should always be a cash refund every. single. time.

Yeah, I generally agree that this is the most plausible explanation. Is it possible that Qantas did this as a plan to hold onto customers money for longer? Yes. But it's more likely just the usual incompetence on their side (unfortunately).

All airlines are incompetent, but the lengths of incompetence seen here beggar belief.

Because each flight has more than 1 passenger affected, and the press release says 98 per cent of impacted international passengers

They were offered. Doesn't mean they took it. And presumably if everyone hit "accept" for the new flight there wouldn't be enough seats to re-acommodate everyone on the same flight.

 

[kangarooflyer88]

One thing that puzzles me and probably all of us why there is no such protection framework like EU261 in Australia yet. Is it a political decision or hotbed that no one wants to touch?

Yeah most politicians wouldn't want to risk having that matte black Chairman's Lounge membership ripped away nor the closure of the Chairman's Lounges in Sydney, Melbourne, Brisbane, Hobart and Alice Springs to name but a few.

It seems like some of the simplest legislation to make the case for and implement, and - if not at the moment - seems like it would have unanimous support or you would be hard pressed to work out why an MP would not support the idea. I don't care if all of them have CL membership and that's stopping them - if that truly influenced their decision then that's called corruption.

In fairness many jurisdictions don't have EU261 legislation. Indeed the number of countries with such legislation can be counted on one hand. Things might change if we see the US adopt it or S'pore.

Mind, the next problem with introducing EU261 style protections is making sure that the airlines cough up in a timely matter when they get it wrong (because they will drag it out as long as they can before they pay up).

Well a lot of lessons could be learned from how the EU rolled out their EU261 legislation with airlines saying things like mechanical issues were outside their control and thus not eligible for EU261. Certainly given the experiences we've seen so far in the EU and Canada, it would be possible to draft legislation that doesn't provide such loopholes to airlines from the start.

What the airlines of course will say is that such legislation will cause air fares to go up, but we haven't seen that anywhere that this legislation has been applied. If anything regulations like EU261 have resulted in air fares dropping. Why? Because it forced airlines to be operationally efficient. No long can they afford to cancel flights and twiddle their thumbs causing them to pay crew and airports for their inefficiencies. No, now they must have contingencies in place to perform well all the time. I frankly could not see an airline like RyanAir or EasyJet take off (pardon the pun) if there wasn't this harsh legislative agenda that forced them to institute quick turn arounds. Could we someday see $20 return fares between Sydney and Perth thanks to such legislation? Only time will tell!

 

[oz_mark]

Geoffrey Thomas (Aviation expert) is pretty confident the ACCC's case will fail.

I've seen a few arguments that think Qantas will win. If so, we made see some rewrite of consumer law to tighten things up.