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Qantas is seeking to rebuild trust with customers following legal action brought against the carrier by the Australian consumer watchdog alleging it continued to sell tickets for cancelled flights in 2022.
Newly appointed CEO Vanessa Hudson on Friday (22 September) issued a public apology to customers for the airline’s recent performance and said the company wants to “get back to being the national carrier that Australians can be proud of”.
“I know that we have let you down in many ways and for that, I am sorry,” she said in a video message.
“We haven’t delivered the way we should have. And we’ve often been hard to deal with. We understand why you’re frustrated and why some of you have lost trust in us,” she said, adding the carrier will seek to make changes such as putting more people in call centres to solve problems and a review of customer policies.
Qantas Group chairman Richard Goyder in a statement earlier this week also admitted the carrier “is experiencing an acute loss of trust from the community, and accumulated disappointment from customers, which the board and management are determined to fix”.
The comments follow the release of the carrier’s FY2023 earnings (from 1 July 2022 to 30 June 2023), where it reported $2.47 billion in profit and a 132 per cent increase in flying compared to the previous year.
However the positive financial results have been overshadowed by legal action recently launched by the Australian competition and consumer commission (ACCC) alleging the carrier “engaged in false, misleading or deceptive conduct” by advertising tickets for flights that it had already cancelled but not removed from sale.
The ACCC alleges that for more than 8,000 flights scheduled to depart between May and July 2022, 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.
It is also alleged that for more than 10,000 flights scheduled to depart in May to July 2022, the carrier did not notify existing ticketholders that their flights had been cancelled for an average of 18 days, and in some cases for up to 48 days. The consumer watchdog alleges that Qantas did not update its “Manage Booking” web page for ticketholders to reflect the cancellation.
Goyder said much of the “loss of trust” stems from the ACCC allegations.
“We recognise the important role of the ACCC and the company has cooperated fully with its investigations, which only crystalised into material allegations when legal action was announced on 31 August this year,” he said.
“These allegations are concerning and have the Board’s full attention… In addition, the Board has applied its discretion to reduce short term incentives for senior executives for FY23 by 20 per cent in recognition of the customer and brand impact of cumulative events,” he added.
The Australian carrier also recently lost an appeal to overturn a previous court ruling that found it has unlawfully outsourced 1,700 ground handling jobs during the pandemic.
Goyder said the Board is “working closely” with Hudson to rebuild the carrier’s reputation after former CEO Alan Joyce quit his role earlier this month, two months earlier than planned, following the ACCC allegations. Joyce received $21.4 million in remuneration for the 2023 financial year, however $2.2 million in bonuses were withheld and Goyder said a total of $14.4 million in additional bonuses is subject to clawback if deemed necessary by the Board.
Goyder added the Board has “significantly increased the weighting on customer outcomes” for remuneration in FY24 and introduced it as a metric on future long-term incentives.
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