Australia’s Qantas Airways agreed to pay A$120 million ($79 million) to settle a regulator lawsuit over the sale of thousands of tickets on already cancelled flights, in an attempt to end a reputational crisis that has engulfed the airline.
The company will split A$20 million between more than 86,000 customers who booked tickets on the so-called “ghost flights” and pay a A$100 million fine instead of defending the lawsuit that it had previously vowed to fight, Qantas and the Australian Competition and Consumer Commission (ACCC) has said.
The fine is the biggest ever for an Australian airline and among the largest globally in the sector, although some Australian banks and casino operators have faced higher penalties for breaches of the law. “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’s brand value tanked in consumer surveys amid a spike in complaints about cancellations. After the ACCC filed its lawsuit last August, Hudson’s longserving 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.
