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Qantas (ASX:QAN) share price rises on defence to ACCC claims

The Qantas Airways Limited (ASX: QAN) share price is higher after the ASX travel share announced its defence against the ACCC allegations.

Qantas share price

Qantas apologizes and defends itself

The airline said that it fully accepts it let customers down during the post-COVID restart, including with high cancellations rates.

It said that the period was extremely difficult for customers, with flying after the shutdowns proving a “challenge for the whole industry, with staff shortages and supply chain issues coinciding with huge pent-up demand.” It acknowledged “unacceptable delays” and that it got many other things wrong and “for that, we have sincerely apologised.”

Qantas said that mistakes were made by the airline, it said the ACCC’s legal case ignores the realities of the aviation industry that airlines “can’t guarantee specific flight times.”

It noted that “all customers on cancelled flights were offered an alternative flight or refund; there was no ‘fee for no service’. Qantas said that customers were “re-accommodated on other flights as close as possible to their original time or offered a full refund.”

Other points of defence

The airline noted that supply chain shortages meant aircraft were grounded, there were huge spikes in sick leave and self-quarantine requirements left the airline short-staffed. Qantas acknowledged that the volume of change was huge and its systems struggled to cope. I’ll point out that the Qantas share price is lower now than it was during the ending months of 2020, as well as a lot of 2021.

Explaining why cancelled flights were left on sale, it said due to system limitations and the sheer number of flights involved, it couldn’t remove the flights from sale automatically while also providing impacted customers with alternative flights. It said some of the longer delays were due to human error and process failures.

How is Qantas ensuring this won’t happen again?

The airline said that cancelled flights are now “taken off sale immediately”, well inside the 48 hours that the ACCC case flags. Qantas said this is a manual process and “would not have been possible during the period the ACCC examined given the level of upheaval at that time.

Qantas said it’s currently developing a tailored IT solution that would link to its third-party system and automate the process.

Final thoughts on the Qantas share price

Between 11 August to now, the airline’s shares have fallen 25%, despite trading conditions not changing that much.

A contrarian investor may think the airline is a value opportunity here, particularly if passengers keep choosing to go with the airline.

It’s not something I’m looking to buy for my own portfolio, but I wouldn’t be surprised if it soundly beat the market over the next three years from here.

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