The Qantas Airways Limited (ASX: QAN) share price is ending a horrible week with another plunge on Friday morning.
In early trade on Friday, Qantas shares are down 1.52% at the time of writing to $5.82 apiece. They closed Thursday at $5.91 each.
The latest news is that the head of the consumer watchdog is seeking a record-breaking corporate penalty against the embattled airline if it's found guilty of selling tickets to cancelled flights.
On Thursday, the Australian Competition and Consumer Commission (ACCC) launched legal action against Qantas, accusing the carrier of advertising and selling 8,000 flights that it knew to be already cancelled.
In addition, passengers on 10,000 flights were not told of cancellations promptly, forcing many to make expensive last-minute changes to their travel plans.
The highest-ever fine for a violation of Australian Consumer Law is $125 million, which Volkswagen Group (ETR: VOW3) copped in 2019 for its in-vehicle software that deceived emission testing.
On Friday morning, ACCC chair Gina Cass-Gottlieb was asked whether she would want to see the Federal Court hand down that sort of penalty against Qantas.
"We would want to get to more than twice that figure, yes," she told ABC Radio National. "We think the penalties should be in the hundreds of millions, not tens of millions for breaches."
Everyone is gunning for the red kangaroo
Cass-Gottlieb said she wants Qantas, if found guilty, to be levied a fine harsh enough that would make corporations genuinely think twice about short-changing customers.
"We are going to seek a penalty that will underline that this is not just to be a cost of doing business, it is to deter conduct of this nature."
The troubles are just the latest in a terrible week for both the carrier and its shareholders, which has led to Qantas shares tumbling 9.4% since last Friday's closing price.
On Monday, chief executive Alan Joyce was excoriated at a senate enquiry and the federal assistant treasurer admitted to protecting the company against competition. Thursday saw the ACCC court action and the airline forced to remove the end-of-2023 expiry on flight credits in response to a fierce public backlash.
The dark clouds have arrived a matter of days after Qantas announced a record-breaking profit — or perhaps because of it.
Australian Financial Review columnist Joe Aston, who has led the public charge against the airline's behaviour, said on Thursday evening that Qantas is finally getting its come-uppance.
The Qantas board well and truly entered Rio Tinto Ltd (ASX: RIO) territory.
"There is no moral equivalence between the destruction of sacred cultural property and ripping off airline passengers but the parallels are otherwise uncanny.
Qantas shares are now down 1.5% year to date.
