The Qantas Airways Limited (ASX: QAN) share price shed more than 1% today amid the ASX airline facing more negative attention.
Today was the first day of public hearings in Sydney of a federal Senate inquiry into flight prices and airline competition.
Qantas has been under fire amid a number of recent events, including allegedly selling tickets for flights that had already been cancelled.
Qantas' reputation takes another hit
Nationals senator Bridget McKenzie is the chair of the inquiry committee. The Age quoted her comments to ABC RN Breakfast about the chair of Qantas' board, Richard Goyder who, she said, was there when the airline decided to "pocket tens of thousands of loyal customers' flight credits". She added:
I think he's overseen some egregious behaviour from his company.
He was also the chair when these illegal sackings occurred and … the ghost flights was sold, so at some point, the board has to take decisions for the management team that they've put in place.
I think this is one of the great questions over the new management team is…Qantas culturally hasn't changed, irrespective of who the CEO is, so I think there's a lot of challenges going forward.
If you're wondering what 'ghost flights' McKenzie is referring to, the Australian Competition and Consumer Commission alleges Qantas advertised and sold tickets on more than 8,000 flights it had already cancelled. It is currently taking Federal Court action against the airline.
The ACCC alleges Qantas kept selling seats on 8,000 flights scheduled to depart between May and July 2022. It will tell the court the sales continued for an average of more than two weeks after the flights were cancelled and, in some cases, for up to 47 days afterwards.
It also alleges that, for more than 10,000 flights scheduled to depart between May to July 2022, Qantas failed to notify existing ticketholders that their flights had been cancelled for an average of about 18 days and, in some cases, up to 48 days later.
The ACCC has also alleged Qantas did not update its 'manage booking' web page for ticketholders to reflect the cancellations.
Of the cancelled flights, the ACCC is alleging that for about 70% of them, Qantas either continued selling flights for at least two days or delayed informing ticketholders that their flights were cancelled for at least two days, or both.
Aggressive competitor
The former Qantas chief economist Dr Tony Webber appeared before the Senate inquiry in Sydney today. According to The Age, Webber suggested Qantas is in a stronger position after COVID-19. He said there was weakened competition due to the exit of Tiger Airways, and that Virgin is not the same airline it was before COVID-19.
Webber also said major airlines are able to exploit Sydney Airport's slot regulation:
The regulatory framework that is currently in operation essentially incentivises, or can be used, in an anticompetitive way.
I think Qantas is one of the most aggressive competitors ever. If a new carrier encroaches on its routes or its market share it will aggressively respond.
Qantas share price snapshot
Since the start of 2023, Qantas shares have fallen by around 8%, though the airline's share price is down 18% since 24 July 2023, as we can see on the chart below.
