Watchdog accuses Qantas of 'false, misleading or deceptive conduct'

Accusing the carrier of "false, misleading or deceptive conduct", the Australian Competition and Consumer Commission claims that between May and July last year Qantas "kept selling tickets on its website for an average of more than two weeks, and in some cases for up to 47 days, after the cancellation of the flights".

In the case launched in the Federal Court, the ACCC accuses Qantas of cancelling almost one in four flights scheduled between May and July 2022 and taking on average 18 days to inform ticketholders of the cancellations - and up to 47 days in some cases.

Among the examples cited by the watchdog is flight QF1764 from Canberra to the Gold Coast on June 27 last year.

Qantas decided to cancel the flight on June 16 - 11 days before it was due to depart - but continued offering tickets on the trip until June 19 and did not inform existing ticketholders of the cancellation until the following day.

The chief executive of Canberra Airport Stephen Byron said the allegations were of "serious concern".

"We continue to see Qantas prioritising profits over the Canberra consumer, who are paying sky-high air fares for the service," Mr Byron said.

The airport boss has previously expressed anger over the large number of flights between Canberra and Sydney which Qantas cancels - more than one a day and more than on any other route in Australia, and has called on the government to set a national standard for flight cancellations, including automatic compensation for affected travelers.

In announcing its legal action, the ACCC highlighted the impact Qantas' actions had had on its customers.

"Reliable air travel is essential for many consumers in Australia who are seeking to visit loved ones, take holidays, grow their businesses or connect with colleagues. Cancelled flights can result in significant financial, logistical and emotional impacts for consumers," ACCC Chair Gina Cass-Gottlieb said.

"We allege that Qantas' conduct in continuing to sell tickets to cancelled flights, and not updating ticketholders about cancelled flights, left customers with less time to make alternative arrangements and may have led to them paying higher prices to fly at a particular time not knowing that flight had already been cancelled.

"As a result, we have commenced these proceedings alleging that Qantas continued selling tickets for thousands of cancelled flights, likely affecting the travel plans of tens of thousands of people."

The ACCC alleges that Qantas made many of these cancellations for reasons that were within its control, such as network optimisation including in response to shifts in consumer demand, route withdrawals or retention of take-off and landing slots at certain airports, Ms Cass-Gottlieb said.

Treasurer Jim Chalmers said the ACCC's allegations against Qantas were "deeply disturbing".

The Treasurer said the government would not comment further on the case while it was before the courts.

But he said the matter showed the consumer watchdog was "doing its job".

"This is a reminder that businesses need to do the right thing by people - breaches of consumer law carry heavy penalties," he said.

In a prepared statement, Qantas said it "takes these allegations seriously".

It said the period cited in the ACCC case was "a time of unprecedented upheaval for the entire airline industry. All airlines were experiencing well-publicised issues from a very challenging restart, with ongoing border uncertainty, industry wide staff shortages and fleet availability causing a lot of disruption. We will examine the details of the ACCC's allegations and respond to them in full in court."

The launch of the legal action heightens the pressure on the airline, which has become the target of significant ire from airports, rival airlines and the public over its business conduct, operations and service standards.

Among those hardest hit by Qantas' behaviour has been travelers between Canberra and Sydney. In July, the airline cancelled 11 per cent of flights - more than on any other route in the country.

Mr Byron had previously savaged the airline's performance, describing it as a "national disgrace".

Responding to the ACCC court action, the airport boss said the airline's explanation for so many flight cancellations were flimsy.

"Each cancellation on the Canberra to Sydney route is the result of a conscious, planned decision by Qantas, who deliberately choose to cancel flights on this route for reasons linking back to Qantas's network optimisation," he said. "Airlines [need] to be held to account over poor performance".

On Monday, Qantas chief executive Alan Joyce was grilled by senators at a parliamentary committee hearing on the airline's performance and conduct.

The senators took aim at the carrier's high rates of flight delays and cancellations, its administration of flight credits, claims that it is hoarding flight slots at Sydney Airport to stifle competition and its lobbying of government to block an application from Qatar Airlines to operate more flights into the major capitals.

Transport Minister Catherine King rejected plans by Qatar to add 21 flights a week to Sydney, Melbourne and Brisbane, saying the application was not in the national interest.

At Monday's hearing, Mr Joyce admitted Qantas lobbied the government over Qatar's plan, and the government has been forced onto the defensive over the issue.

Prime Minister Anthony Albanese rejected criticisms of the decision to block Qatar Airways, arguing Australia had "the most open aviation system in the world".

Mr Albanese said there was "nothing unusual" in the rejection of Qatar's application.

But AMP chief economist Shane Oliver said the government's decision made no sense.

Dr Oliver said it was incompatible with the government claimed goals to boost competition and productivity and reduce inflation.

"We need to boost productivity and get inflation down and they baulked at doing that in favour of protectionism from the 1960s," he said.

The government has said issues regarding airline competition will be addressed in an aviation Green Paper due out soon.

The watchdog's case does not include the actual cancellation of flights but the airline's conduct after flights had been axed.

It is seeking orders including penalties, injunctions, declarations and costs.