Australia's biggest airline is paying millions for selling tickets to canceled flights

Original source (on modern site) | Article images: [1] [2]

Qantas sold tens of thousands of customers tickets for flights that had already been canceled, according to the Australian Competition and Consumer Commission.Photo: Jenny Evans (Getty Images)

Australia's biggest airline has agreed to pay a A$100 million ($66.1 million) in a civil penalty and millions more to customers to settle litigation accusing it of selling thousands of tickets for flights that had already been canceled.

Nvidia stock has all-time closing high in its crosshairs

The Qantas Group said its settlement with the Australian Competition and Consumer Commission (ACCC) included up to A$20 million ($13.2 million) in payments to compensate passengers who bought seats on flights that wouldn't be taking off. Each of the more than 87,000 customers affected will receive between $225 and $450, according to the settlement.

The civil penalty is pending approval from the Federal Court of Australia, and if approved, it will be the largest settlement for a corporate penalty ever agreed to by the ACCC. Qantas said it will begin the remediation plan ahead of the approval process.

"Today represents another important step forward as we work towards restoring confidence in the national carrier," Qantas CEO Vanessa Hudson said in a statement.

The ACCC in August alleged that Qantas had advertised and sold tickets for more than 8,000 flights that had already been canceled in its internal system between May and July 2022. During that time, 15,000 out of 66,000 flights offered by the airline were canceled.

The so-called "ghost flights" — combined with thousands of job cuts, stubbornly high airfare, and a refusal to return billions of dollars in subsidies — have understandably tarnished Qantas' reputation. The airline told The Guardian last year it "will take time to repair" trust with its customers. Then-CEO Alan Joyce, who became the chief executive in 2008, resigned in September, about two months ahead of schedule.

"Qantas' conduct was egregious and unacceptable," ACCC Chair Gina Cass-Gottlieb said in a statement, adding that the airline has agreed "not to repeat this type of conduct" in the future."

The ACCC said Qantas will now notify customers if their flights are canceled "as soon as practicable" and no more than 48 hours before deciding to cancel the flight. It will also stop selling canceled flights within 24 hours of its decision to cancel. Those practices also apply to Jetstar, its airline subsidiary.