Australia’s Qantas Airways reportedly agreed to pay a hefty $66 million fine to settle a regulator lawsuit over the sale of thousands of tickets on already cancelled flights, in what is came to be known as the ‘ghost flights’ scandal.
The airline will also fork out $13 million in compensation to 86,000 travellers impacted by the cancellations and botched rescheduling.
Australia’ competition watchdog said Qantas “admitted that it misled consumers” by advertising seats on tens of thousands of flights — despite those flights being cancelled.
The fine is the biggest ever for an Australian airline and among the largest globally in the sector.
“We recognise Qantas let down customers and fell short of our own standards,” CEO Vanessa Hudson said in a statement.
The settlement “means we can compensate affected customers much sooner than if the case had continued in the Federal Court,” added Hudson, who started her role in September, noting the court still must sign off on the settlement.
If the court approves, the settlement will resolve a dispute that had featured prominently at a time when Qantas’ brand value tanked in consumer surveys amid a spike in complaints about cancellations.
After the Australian Competition and Consumer Commission (ACCC) filed its lawsuit last August, Hudson’s long-serving predecessor, Alan Joyce, brought forward his retirement.
“This penalty … will send a strong deterrence message to other companies,” ACCC Chair Gina Cass-Gottlieb said in a statement.
The payout, however, would pale against the A$1.47 billion net profit that analysts on average forecast Qantas to report in the year to end-June, according to LSEG data.
People who bought tickets on non-existent domestic flights would get A$225 and people with international fares would get A$450, on top of a refund, the airline and regulator said.
