In a bid to resolve a reputational crisis stemming from the sale of tickets for non-existent flights, Qantas Airways has agreed to a landmark settlement of 120 million Australian dollars ($79 million), marking the largest payout ever by an Australian airline.
The agreement, announced jointly by Qantas and the Australian Competition and Consumer Commission (ACCC) on Monday, will see the airline allocate 20 million Australian dollars to compensate over 86,000 affected customers who booked tickets for the so-called “ghost flights.” Additionally, Qantas will pay a hefty fine of 100 million Australian dollars, foregoing its previous stance of contesting the lawsuit.
CEO Vanessa Hudson acknowledged the airline’s failure to meet customer expectations, stating, “We recognize Qantas let down customers and fell short of our own standards.” Hudson emphasized that the settlement would expedite compensation for affected customers pending court approval.
ACCC Chair Gina Cass-Gottlieb hailed the penalty as a strong deterrent for corporate misconduct, emphasizing Qantas’s commitment not to repeat such actions.
While the payout represents a significant sum, it pales in comparison to Qantas’s projected net profit of 1.47 billion Australian dollars for the fiscal year ending in June, as forecasted by analysts.
Under the terms of the settlement, customers who purchased tickets for non-existent domestic flights will receive $225, while those with international fares will be compensated $450 in addition to receiving refunds.
The lawsuit, initiated by the ACCC last August, focused on the aftermath of Australia’s reopening borders in 2022 amidst global disruptions caused by the COVID-19 pandemic. Despite Qantas citing industry-wide challenges, the ACCC maintained that the airline violated consumer laws by selling tickets for flights that had been canceled, sometimes weeks prior.
With the settlement, Qantas has committed to refraining from repeating the conduct in question, marking a significant step towards restoring trust and transparency in its operations.
