SYDNEY (Reuters): Australia’s competition regulator said on Friday it would ask the court to fine Qantas Airways (QAN.AX) “hundreds of millions” of dollars, a day after suing the carrier for allegedly selling tickets to thousands of flights after they were cancelled.
The Australian Competition and Consumer Commission (ACCC) said in court filings on Thursday that Qantas broke consumer law when it sold tickets to more than 8,000 flights between May and July 2022 without disclosing they had been cancelled.
Qantas has said it would review the ACCC’s allegations and respond in court, and that the period examined by ACCC was a time of “unprecedented upheaval for entire airline industry”. It declined to comment on the latest comments by ACCC.
After Australia opened its borders in late 2021 after the pandemic, Qantas bore the brunt of complaints about flight cancellations and lost luggage mostly due to staff shortages.
“We are going to seek a penalty that will underline that this is not just to be a cost of doing business, it is to deter conduct of this nature,” ACCC Chair Gina Cass-Gottlieb told ABC Radio. The maximum penalty Qantas faces is 10% of annual turnover, which was A$19.8 billion in the year to June, according to Australian consumer laws.
Qantas shares were down nearly 2% at A$5.83 in afternoon trade on Friday, after falling as much as 3.81% a day earlier to their lowest price since Nov. 22.
Cass-Gottlieb said the ACCC would seek a fine for Qantas that was “significantly more than” the record A$125 million ($81 million) automaker Volkswagen was fined in 2019 for breaching Australian consumer laws.
“We consider these penalties have been too low, we think the penalty should be in hundreds of millions, not tens of millions”, she added. “We would want to get more than twice that figure.”
The regulator has said that Qantas kept selling tickets for an average of 16 days after it had cancelled flights for reasons often within its control. It sold tickets to one Sydney-to-San Francisco flight 40 days after it had been cancelled.