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Exclusive: Watchdog calls on public for Qantas ‘price gouging’ evidence

written by Hannah Dowling | March 29, 2022

A Qantas A330-300, as shot by Victor Pody

The ACCC is appealing to the public for evidence that Qantas is raising prices on tickets purchased with flight credits accrued during COVID.

It follows separate “price gouging” investigations by Nine’s A Current Affair and the ABC this year that showed some customers paying more than double the price for economy seats when paying with Qantas flight credits, over those paying with cash or card.

Qantas denies the accusation and has indicated any fare discrepancies are due to recent rules that restrict flight credit holders to only purchase tickets of the same fare class or higher. Virgin and Rex customers, however, are not affected by similar policies.

Australian Aviation can reveal the consumer watchdog has now opened a public consultation for Qantas customers attempting to cash in flight credits earned throughout the pandemic.

The ACCC says, “In particular, we’re interested if the available fare prices for flights are higher when you try to book using your flight credit than when you try to book using other forms of payment (such as cash or credit card) on Qantas’ website.”

In the five-minute survey, the ACCC asks affected customers to provide details and evidence (such as screenshots) that they have been offered higher airfares when booking new flights with flight credit, as opposed to customers paying with cash or card.

It comes after disgruntled customers took to Twitter to highlight their grievances, with one user, @NadeenaWhitby, highlighting a $225 price difference when using cash versus flight credits.

Meanwhile, user @MerliynRees said the difference in cost was “more than double” when trying to use flight credits, as opposed to purchasing a normal seat.

A spokesperson for the ACCC said the watchdog is “seeking views from consumers about their experience using flights credits they received for services cancelled by the airline”.

“The ACCC is aware that some consumers are facing difficulties in using credits that have been provided as a remedy for COVID-19 cancellations,” the spokesperson added.

The issue first caught media attention in February, when Nine’s A Current Affair spoke with numerous Qantas customers who claimed to be offered far higher fares when trying to spend their flight credit, than when they viewed the same flights through Qantas’ website.

One customer, Kate Gurjian, said flight credit fares on offer were almost double the price others were paying for the same service.

“It’s not honest, and it’s not Australian not to be honest,” she said.

Later, Dean Ransom told the ABC that he paid three times more for an economy seat next to his wife on a planned trip from Adelaide to Brisbane, as he was paying for his ticket with credits.

According to Ransom, the Qantas website restricted all the cheaper options for seats, meaning he could only view and purchase a ticket that was of equal or higher value to the flight credit he was holding.

The result meant that Ransom had to pay $1,400 in flight credit for an economy seat beside his wife, who’s ticket was purchased for $437 on a credit card.

“The seats were identical, and we sat next to each other,” he said.

“In other words, Qantas gouged the credit value and gave me a $400 seat for $1,400.”

Since the beginning of the pandemic, airlines have offered customers greater flexibility for changing and cancelling flights due, in light of ever-changing border rules and COVID isolation requirements.

In response to these price-gouging allegations, a Qantas spokesperson told Australian Aviation that while the airline previously offered more flexibility in the use of flight credits during the pandemic, the company in September reinstated some additional terms and conditions for flight cancellations and changes.

“Right now, if people book a flight and then choose not to go, they get a flight credit with some rules attached,” the Qantas spokesperson said, clarifying that if Qantas is the party to cancel the booking, then additional flexibility is offered, such as the ability to rebook a lower fare than the original booking.

“The message for customers is that we offer a lot more flexibility with booking than pre-COVID, but we still have some rules in place. We’re completely transparent about that and other major airlines have a similar approach,” they said.

In an earlier statement to Nine, Qantas group executive for corporate affairs Andrew McGinnes elaborated and stated that for these fares purchased more recently, customers can only cash in their flight credit on “the same type of fare”, if not higher, than was originally purchased.

“So, while some cheaper fares might appear [on that flight], your credit has to be used for the same type of fare you bought originally, so its ‘apples and apples’,” he said.

“That’s really the main rule we put back in [in September].”

The airline said only around 5 per cent of customers currently holding flight credit are impacted by these new rules.

However, rivals Rex and Virgin don’t currently have any such stipulation that enforces a like-for-like purchase when using flight credit.

While Virgin Australia has slightly different rules for flight credits for flights scheduled before it entered voluntary administration in 2020 – by having a capped number of seats per flight available for purchase with this credit – overall, flight credits can be spent on any available fare type, much like customers purchasing with cash or credit card.

Meanwhile, Rex continues to offer all customers with a full refund on cancelled airfares, through to 30 April 2022.

Comments (3)

  • Vannus

    says:

    The base line here, is ticket holders’ do NOT read the conditions’ of the ticket issued to them.

    It’s not until they want to utilise the value, that they realise there ARE conditions’ attached.

    Usually, a ticket ‘in credit’, to be ‘redeemed’ must be at a fare equal to, or higher than, the original purchase.
    You cannot use a ‘part’ of a ticket credit, eg $200 new booking, leaving $300 ‘spare’, of a $500 credit.

    The airline can change these conditions, eg earlier in pandemic, but those changes must be in accordance with IATA Fares & Ticketing Rules.
    Any IATA member airline is governed by these rules. QANTAS is an IATA member.

    It’s IMPERATIVE ticket holders READ the conditions’ of the ticket they’re purchasing.
    This has ALWAYS been the case.

  • The experience I have had trying to contact Qantas both by phone and on their website has left me with no alternative but to never travel with Qantas again. I have spent almost 8 hours waiting during various calls just to be either told everything will be fixed, which it wasn’t or just being cut off. I realised that the people I was talking to were in other countries with no knowledge of what to do and no ability to do it. Ticket processing is done in New Zealand . The reason I called was in regard to credit vouchers. It is obvious that Qantas wants to make it difficult to get these credits and they must have thousands of dollars that belong to their passengers.
    Alan Joyce should be sacked and new management created to fix the terrible mess that Qantas is today.

  • Mark Harding

    says:

    My mistake was to cancel tickets online, instead of waiting for ever in the phone queue. I was completely unaware that Qantas would only refund the taxes not refund of the full cost of the ticket. Consequently Qantas refunded about $200 of a $1000 fare. Of course, once having spoken to Qantas staff, I now realise that I should have applied for a credit voucher. If the conditions governing refunds of tickets are posted on the Qantas website these were not disclosed, as far as I was aware, when I was cancelling.

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