Qatar-Virgin deal set to get go ahead

The airline landscape in Australia is set for a major re-set with the consumer watchdog proposing to grant authorisation to Virgin Australia and Qatar Airways which will allow them to engage in co-operative conduct under an integrated alliance for five years.

Virgin Australia and Qatar Airways are seeking authorisation to engage in an integrated alliance where Virgin Australia, in partnership with Qatar Airways, will commence 28 new weekly return services between Doha and Perth, Brisbane, Sydney and Melbourne.

Under the proposed arrangements, Virgin Australia would use Qatar Airways’ aircraft and crew to operate the new services. This is known in the aviation industry as ‘wet lease’ arrangements.

The ACCC said today that it considers that the proposed co-operative conduct is likely to result in public benefits and is unlikely to result in any public detriment. 

Which will likely infuriate Virgin competitor Qantas.

"We consider that the proposed co-operative conduct would likely result in several public benefits including providing enhanced products and services for air travellers which would include increased choice of international flights, with additional connectivity, convenience and loyalty program benefits for consumers,” ACCC Commissioner Anna Brakey said.

The new air services are subject to final regulatory approvals by the ACCC and other government bodies. 

The ACCC is now seeking feedback on this draft determination before it makes a final decision.

The ACCC granted interim authorisation to Virgin Australia and Qatar Airways on November 29 to enable them to commence marketing and selling the new Australia-Doha services.

When granting interim authorisation, the ACCC accepted a court-enforceable undertaking from both airlines which ensures that if any of the necessary final regulatory approvals are not granted, then customers who have booked the proposed new services will be given the option of a refund or re-accommodation on a suitable alternative flight at no additional charge and would be compensated for any reasonably foreseeable costs.

A number of interested parties have since raised concerns with the ACCC that the proposed co-operative conduct would circumvent Australian workforce laws and regulations, and that the lack of time limits on the use of Qatar-based crew to operate the new services will have negative implications for the Australian aviation workforce.

“We consider that Virgin Australia is unlikely to commence operating long-haul international services between Australia and the Middle East on a stand-alone basis in the next five years,” Brakey said.

“In those circumstances, we do not consider that there is likely to be a material detrimental impact on the Australian aviation workforce as a result of the conduct.”

Under the proposed arrangements Velocity Frequent Flyer members will continue to be able to earn and redeem Velocity points on Singapore Airlines operated services globally, including to and from Europe, the Middle East and Africa. 

Virgin Australia’s arrangements with South African Airways and Virgin Atlantic would be unchanged. 

The ACCC is seeking submissions in response to the draft determination by March 7 before making its final determination.

Consumer watchdog accuses Webjet of making false claims and misleading customers

Australia's consumer watchdog has charged online travel booking site Webjet with making false and misleading claims to customers.

The ACCC said in a statement that it has today commenced proceedings in the Federal Court against Webjet Marketing Pty Ltd for "allegedly making false and misleading representations to consumers about flight prices and bookings".

Webjet’s app and website offers travel-related products and services to consumers, including from different airlines. Consumers can compare and book flights, hotels, car rental and travel insurance through the Webjet website and app.

The ACCC alleges Webjet breached the Australian Consumer Law when it made statements on its app, in marketing emails, on social media and on its website about the minimum price of airfares - which omitted compulsory fees charged by Webjet.

The statements included “flights from $x” when the price quoted excluded Webjet’s compulsory ‘Webjet servicing fee’ and ‘booking price guarantee’ fee which ranged from $34.90 to $54.90 per booking, depending on whether the flights were domestic, NZ/Pacific flights or other international flights.

These statements were made for various periods of up to five years between November 2018 to November 2023.

The Webjet fees were not disclosed in Webjet’s social media posts.

Although the Webjet website, Webjet app and most promotional emails contained information about the Webjet fees, it was typically only accessible by scrolling towards the bottom of the relevant screen, was in fine print and not sufficiently clear or prominent.

“We know how much Australian consumers value air travel to stay connected for work, leisure or to visit family," said ACCC Chair Gina Cass-Gottlieb.

"During this time of cost pressures, many consumers are carefully considering travel arrangements and seeking to save money. A statement about the lowest price must be a true minimum price, not a price subject to further fees and charges before a booking can be made.”

Webjet is also alleged to have breached consumer law by displaying a confirmation page online and sending a confirmation email after taking payment for a completed flight booking when in fact, in respect of 382 bookings, it had not booked the flight with the airline.

In these cases, Webjet later allegedly sought additional payment from the consumers to complete the booking, or offered the consumer a refund for the flight, despite having earlier confirmed the booking.

Some consumers may have made and paid for other travel arrangements on the basis of the confirmation so may have had to choose between paying more money or cancelling other arrangements at a potential loss.

It is alleged that Webjet made these misleading representations in respect of 382 bookings over more than five years, between at least November 1, 2018 and June 25, 2024.

“We are very concerned about this alleged conduct by Webjet, which represented to consumers that their flight booking had been confirmed and left some consumers in the position of having to pay more to later complete the booking,” Cass-Gottlieb said.

“The ACCC is currently prioritising consumer and competition issues in the aviation sector as well as conduct in the digital economy.

"We remind all businesses, whether they are online retailers or bricks and mortar stores, that they need to comply with the Australian Consumer Law by not misleading consumers and displaying prices clearly, including hidden fees and surcharges.”

The ACCC is seeking pecuniary penalties, declarations, injunctions, consumer redress, costs and other orders.

Consumer watchdog unleashes on Qantas

Consumer watchdog the Australian Consumer and Competition Commission is sometimes derided as a toothless tiger, accused of failing to act against serial offenders.

Today, however, the ACCC has initiated legal action in the Federal Court of Australia against national airline Qantas, alleging that the carrier has engaged in "false, misleading or deceptive conduct" by advertising tickets for flights that it had already cancelled, sometimes weeks earlier.

The ACCC has accused the airline of selling tickets for more than 8,000 flights scheduled to depart between May and July 2022, alleging the Australian flag carrier kept selling tickets on its website for what is alleged to be an average of more than two weeks - and and in some cases for up to 47 days -after the cancellation of the flights.

The ACCC also believes that for more than 10,000 flights scheduled to depart in May to July 2022, Qantas did not notify existing ticketholders that their flights had been cancelled for an average of about 18 days.

The ACCC alleges that Qantas did not update its “Manage Booking” web page for ticketholders to reflect the cancellations.

“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," the ACCC said.

The action comes at a particular interesting time with the Australian government lately being accused of giving Qantas favourable treatment over its rivals.

The ACCC is Australia's national competition, consumer, fair trading and product safety regulator.

“The ACCC has conducted a detailed investigation into Qantas’ flight cancellation practices," ACCC chair Gina Cass-Gottlieb said.

"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.

“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.

“There are vast distances between Australia’s major cities. 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.”

As an example of the conduct, the ACCC said ticketholders scheduled to fly on Qantas flight QF93 from Melbourne to Los Angeles on May 6, 2022, were first notified of the cancellation on May 4, two days before the scheduled departure and four days after Qantas had cancelled the flight.

One consumer was provided with a replacement flight a day before their original departure date, which was communicated only by the Qantas app. As a result, the consumer had to change connecting flights and had a 15-hour layover in Los Angeles, which had a significant impact on the consumer and left them $600 out of pocket.

The ACCC is seeking orders including penalties, injunctions, declarations, and costs.