Airline accused of ‘price gouging’ after consumers pay triple

Consumers have slammed the Qantas flight credit redemption scheme as “deceptive” and “dishonest”, accusing the company of “price gouging”.

Evidence including emails, videos and screenshots supplied to the ABC suggests that prices for the same flight were jacked up when a customer used a flight credit or voucher.

The price gaps ranged from 50 per cent to 300 per cent more, depending on the credit value, compared to when people made fresh bookings.

‘Morally wrong’

In October last year, Dean Ransom booked two round trips from Adelaide to Brisbane for December. He ended up paying three times more than his wife for the same economy seat.

He said the Qantas website restricted all the cheaper options for seats and only made available tickets that were equal to or more than his credit – more than $1400 received from previous flight cancellations in mid-2021 due to COVID.

When he tried to book for his wife without using a credit, the cost was $437.

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

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

But that trip was disrupted when the Queensland government declared Adelaide a COVID hotspot in late November and introduced strict border conditions, including quarantine.

Mr Ransom had to cancel the flights and re-book for another date. This time, he ended up paying even more.

He said the online system only offered him the choice of business class, which costs more than $1600.

Given his credit expiring at the time, Mr Ransom said he unwillingly paid over $200 extra in cash on top of the credit for his seat, where his wife’s ticket was still around the same price, at $464.

“They never wanted to give [my money] back, no matter what, and to me, that’s morally wrong,” Mr Ransom said.

“The biggest frustration is that if you have a problem like this, we want to find out why or ask a question about the terms and conditions, you can’t get through to them.”

Mr Ransom said he made complaints to Qantas via their Messenger chat and Facebook page but didn’t get a proper response and his phone calls went unanswered.

‘Deceptive and dishonest’

Another long-term Qantas flyer, James Evans, also expressed his disappointment.

A man sits on a coach smiling.
James Evans says the way Qantas system works is “inappropriate”. (Supplied: James Evans)

When he was booking a flight back in October, he not only noticed the price was cheaper when not using a credit, but also the prices varied when using different vouchers.

“At first, I was like is this one of those IP address things, where they’re tracking what I’m doing and then the flight changes,” he told the ABC.

“[Then] I became very suspicious, and I was like, this is not right.”

He had multiple vouchers valued from $88 to $450. Each time he punched in a different redeem code, the price changed, for the same flight.

“When I used the flight credit of $450, each of the tickets came up at around $237 one-way, Sydney to Melbourne,” Mr Evans said.

“Same flight, same airline … when I went to redeem one of the other flight credits that was only $88 or $100, the flight came up one-way at $130.”

He said he called the Qantas customer service to seek answers and was told by a representative that the system would allocate a ticket that matched the credit value.

“That’s ridiculous. Because you say it’s your policy does not make it right,” he said.

“It is a deceptive and dishonest way of conducting business. For a national carrier who is presumed to be one of the most trusted businesses in Australia.”

Mr Evans said he managed to get a refund on the excess he paid, but the system was unchanged.

The ABC also spoke to several other Qantas customers who had similar experiences when redeeming their credits.

‘We still have some rules in place’

Last year, Qantas made some changes in its flight credit policies.

If a customer made a booking after September 30, 2021, the flight credit could only be used on an equivalent or more expensive seat; before that, there were fewer limitations and the credit could be used for multiple bookings.

Qantas said the company removed virtually all of the rules it had around flight credits, given the huge disruption to people’s travel plans, early in the pandemic, but it has started to wind back some of the rules since last September. 

“We offer a lot more flexibility with booking than pre-COVID, but we still have some rules in place,” a spokesperson told the ABC.

“We’re completely transparent about that and other major airlines have a similar approach.”

The company said if people booked a flight and then chose not to go, they would get a flight credit with some rules attached.

But it said that would only account for less than 5 per cent of the flight credits it was currently holding.

“If we cancel the flight, people have complete flexibility, including a cash refund or rebooking any type of fare, to the value of their credit,” the spokesperson added.

“And if there are extenuating circumstances, we encourage people to talk to us.”

Qantas previously told the ABC that the majority of its customers who have flight credits have until the end of 2023, or more than two years, to take their flights.

A woman hold a report in an office.
Erin Turner says the problems around flight credits highlight the weaknesses of the travel rights in Australia. (ABC News: John Gunn)

But consumer advocates say a travel credit should work just like cash – there shouldn’t be extra fees, restrictions or limits.

“It’s deeply unfair for any company to charge people more when they are trying to use a travel voucher or credit,” Erin Turner, director of campaigns from CHOICE, told the ABC.

“Airlines and any other travel provider shouldn’t be trying to make extra profits from people who have accepted travel vouchers instead of a refund when they weren’t allowed to travel.”

The ACCC would not comment on any complaints or investigation regarding Qantas but said it understood that different terms may apply to Qantas credits, depending on the circumstances of the cancellation of the original fare.

It said that in some cases the fare conditions that applied to the consumer’s original booking applied to the use of the credit.

“For some fare conditions, this means that the consumer needs to redeem their credit on a fare that is of equal or higher value than the original booking,” a spokesperson said.

“Consumers with such credits will only see the availability of eligible fares when they seek to redeem their credit.

“Consumers should check the terms and conditions of any credits to understand how they can be used.”

Have you experienced problems using credits to book travel? Why not share your experience in the comments section below.

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