Qantas perfects the art of the non-apology with ACCC settlement

Qantas also said the $120 million will be recognised in its financial accounts as an item outside underlying profit. That means it will have zero impact on the profit measure that determines half of Hudson’s bonus. Half her luck.

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“We absolutely have maintained and continue that we did not take fees for no service,” she insisted.

Hudson is strictly correct that as part of the settlement, the ACCC dropped its claim that Qantas wrongly accepted payment from the affected customers.

But what is always omitted from analyses of the ghost flights misadventure is that the ACCC’s action evolved out of its original investigation into Qantas’ COVID flight credits, which single-handedly made Qantas the most complained-about company in Australia.

When Qantas cancelled flights during the pandemic, which it regularly did, tickets were transferred into COVID flight credits. Redeeming those credits was, for so many customers, outrageously difficult. It is near impossible to resist the conclusion that it was difficult by design.

Qantas customers were in 2020 owed $2 billion in COVID credits but by August last year, with all remaining credits set to expire on 31 December 2023, Qantas was assuring the public that the balance was down to $370 million. Then a Senate committee forced Qantas to admit that, actually, the balance was $570 million!

That’s why, days before that Senate hearing, unveiling a record $2.5 billion profit for 2023, Vanessa Hudson said, “This is not as good as it gets for Qantas,” presumably because she was counting on $500 million of expired COVID credits dropping straight into her profit for 2024. That was undeniably an attempt at fees for no service.

Sadly for Hudson, when the ACCC launched its bombshell action over the ghost flights, it also forced Qantas to remove the expiry dates from all COVID credits. But this is all in the past, right? Wrong.

When you attempt to use a flight credit, Qantas transfers you into a special booking engine which displays airfares that are often significantly higher than the airfares offered on the exact same flights in the regular qantas.com booking engine.

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This is the system whether you were attempting to use a COVID flight credit in the past or a regular Qantas flight credit today (regular flight credits replaced COVID flight credits for any cancelled bookings after October 2021 and unlike COVID credits, they expire after 12 months).

In recent months, Qantas added a legal disclaimer to this process. “If you use a payment method other than Flight Credit on qantas.com,” it says, “lower fares may be available.”

Customers are forced to click “I understand” if they wish to proceed and redeem their credit. There is no “I don’t understand” button. You can either indicate your understanding that you are being ripped off or you can forfeit all of your money. Those are your binary options.

Qantas then hits you with a $99 booking fee, which they deduct from your credit, even though your re-booking has been 100 per cent self-administered!

What’s more, “You can only use your Flight Credit to book fares that are equal to or higher than the value of your Flight Credit.” Therefore, if you have a $500 credit and the airfare you want to book is $199, you simply lose $301 (or technically $202 once you factor in the self-booking fee). Qantas adds that $301 to its gargantuan profits as “breakage” revenue.

Qantas could issue you with a new $301 credit. That would be the ethical thing to do, but being ethical is expensive so they don’t.

At the very minimum, Qantas has banked multiple tens of millions of dollars this way and by the definition of any ordinary, reasonable citizen, it is deceptive conduct. It is legal theft at scale and it is still happening.

So many Australians have had, and continue to have, infuriating experiences with these credits. It is occurring right under the noses of our politicians and regulators whose apathy on the matter is profoundly depressing.

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Ghost flights were just one in a suite of behaviours that were emblematic of Qantas’ poor culture. To suggest that settling this one matter means Qantas is now a trustworthy company is to be wilfully blind to extremely recent history.

If Vanessa Hudson changed Qantas’ unbelievably aggressive revenue management practices, I would agree with her pretension to be “restoring confidence in the national carrier”. Until then, it looks to me like just another chapter in Qantas’ storied history of image management.

Joe Aston is a former Financial Review columnist. His upcoming book on Qantas, The Chairman’s Lounge, will be published by Simon & Schuster in late 2024.