Qantas Airways has agreed to pay 120 million Australian dollars ($79 million) to settle a lawsuit over the sale of tickets on canceled flights, in an attempt to end a reputational crisis. The settlement includes compensating over 86,000 customers who booked tickets on the so-called “ghost flights” and paying a fine of 100 million instead of fighting the lawsuit. This fine is the biggest ever for an Australian airline and among the largest globally in the sector. Qantas CEO Vanessa Hudson admitted the company had let down customers and fell short of its standards, leading to the settlement to compensate affected customers sooner than if the case had continued in court.
The settlement will resolve a dispute that negatively impacted Qantas’s brand value and led to a spike in complaints about cancellations. It comes after the Australian Competition and Consumer Commission (ACCC) filed a lawsuit last August, prompting Qantas CEO Alan Joyce to bring forward his retirement and be replaced by Vanessa Hudson. The ACCC chair Gina Cass-Gottlieb stated that the penalty would send a strong deterrence message to other companies. However, the 120 million payout is significantly lower than the 1.47 billion dollar net profit analysts had forecast for Qantas in the upcoming year, according to LSEG data.
Those who purchased tickets for non-existent domestic flights will receive $225, while international fare holders will get $450, in addition to a refund. The ACC lawsuit revolved around the months following the reopening of Australia’s borders in 2022 after Covid restrictions, during which airline cancellations and complaints of lost luggage increased globally due to staffing shortages. Qantas argued that it faced similar challenges as airlines worldwide, but the ACCC found the company’s actions to be in violation of consumer law, selling tickets to flights weeks after their cancellation. As part of the settlement, Qantas has promised not to repeat this conduct in the future to avoid further legal issues.
