Billion-dollar profits, Covid travel credits and a $250 million lawsuit: What’s going on with Qantas?

The last few weeks have seen Qantas take hit-after-self-imposed-hit. The spirit of Australia has left a bitter taste in the mouth of the public, which worsened after its $2.5 billion in posted profits was swiftly chased by a $250 million lawsuit for selling tickets for cancelled flights during the pandemic.

TLDR: What’s going on with Qantas

Eight-thousand flights. This is the number that the ACCC is alleging Qantas sold tickets to between May and July 2022, despite those flights already being cancelled by the airline.

The industry watchdog is also claiming that in the case of over 10,000 flights scheduled to depart during this period, ‘the flying kangaroo’ didn’t notify existing ticket holders for an average of 18 days. In some cases, this is said to be up to 48 days.

“The ACCC has conducted a detailed investigation into Qantas’ flight cancellation practices. 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,” ACCC Chair Gina Cass-Gottlieb said in a statement.

“We allege that Qantas’ conduct in continuing to sell tickets to cancelled flights, and not updating ticket holders 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.”

Qantas has responded to the allegations, but has largely remained vague while attempting to point out the time in question being tough for the entire airline industry.

“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,” Qantas said in a statement.

“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. 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.

This is just the latest drama for the airline, which has been making headlines for weeks over questionable conduct. Back in July, the federal government rejected a bid from Qatar Airways regarding an extra 21 flights per week servicing Melbourne, Sydney and Brisbane.

While it was highly speculated that this move may have been to protect Qantas, this was only confirmed this week when Assistant Treasurer Stephen Jones said that this was in the national interest and assist in keeping Qantas profitable.

These comments were made just a week after Qantas posted a record $2.5 billion in profit (coming to $1.7 billion after-tax) for the last financial year.

Since then it has also admitted to sitting on $570 million in unredeemed flight credits from cancelled flights during the pandemic. While the airline planned to let these credits expire in late 2024, it has been forced to backflip and make the ability to redeem these or seek a refund indefinite due to widespread backlash.

Qantas also copped heat when it was revealed that Prime Minister Anthony Albanese’s 23-year-old son was granted membership to the Chairman’s Lounge — an honour usually reserved for politicians and CEOs of companies that spend big with the airline.

Qantas has been losing altitude for awhile now

While the negative Qantas news has been coming in thick and fast of late, the airline has been under fire for awhile now.

Customer complaints around high ticket prices, increased flight delays, and cancellations have become the norm in 2023. And they’ve been backed up by the ACCC’s Airline Competition report from June.

It included some damning statistics about Australian airlines, with 3.9% of flights being cancelled. It also revealed that only 71.8% of its flights arrived on time in April as well as a 51% increase in economy-class international airfares compared to 2019.

To make matters worse, the report also noted that jet fuel pricing had reduced by almost half since it peaked in June 2022.

“The downward trend in the price of jet fuel should enable the airlines to pass on more savings to consumers in the months ahead,” ACCC Chair Gina Cass-Gottlieb said at the time.

But that hasn’t happened. Service disruptions have continued and prices have remained high. And with the Qatar blocking, there are now even further accusations of attempted price gouging as Virgin Australia and Qantas keep their tight duopoly on the local market.

The effect on SME business travel

And it’s not just individuals who are feeling the effects. Qantas has a dearth of business customers wetted to its Business Rewards program.

In exchange for their loyalty to the brand, business customers are able to earn points, access flight savings, and even use a dedicated business portal for bookings. And for the high flyers consistently going the extra mile, there are even dedicated account managers.

This is all well and good until you consistently meet with cancelled or delayed flights which could result in missed business meetings, deals and potential revenue for your business.

It’s become a common story that is consistently surfacing by frustrated professionals on LinkedIn.

“Our small business is based on the NSW Central Coast. But we have clients all over Australia and Asia who rely on accessing regular domestic and overseas flights for specific PR events, media training and running stakeholder engagement workshops,” Amber Daines, chief communicator at Bespoke Co, said in an email to SmartCompany.

“Qantas has long been our choice of airline as we have Qantas Business Class lounge access and knew they had been always reliable for important travel, often at the last minute or on a specific timeframe. For example, fly in and out same day to Melbourne or Brisbane.

“Since the pandemic, the story has been a different one. A few times we have ended up driving 11 hours instead of relying on unreliable domestic flights which had been cancelled last minute or delayed beyond reproach. The hassle of getting refunds, or credits means we have probably not just lost travel time but over $4,000 in the past year. We now fly other airlines even if they are more expensive.”

While $4,000 may be a drop in the SYD – LAX ocean for larger companies, that’s a great deal of wasted money and time for an SME. It’s also a slap in the face to those who have stuck with Qantas despite the turbulence of the last few years.

They rightfully expect exemplary customer service from a company that is propped up by the government and rolling in $1.7 billion in real-world status credits.

Instead, they’re left with the echo of I Still Call Australia Home that haunts the empty gate of yet another cancelled flight.