Qantas Settles Regulatory Lawsuit, Agrees to A$120 Million Deal Over 'Ghost Flights' Controversy

“We recognise Qantas let down customers and fell short of our own standards,” Vanessa Hudson said in a statement.

Qantas Airways of Australia has reached an agreement to settle a regulatory lawsuit regarding the sale of tickets for flights that had been cancelled. The company has agreed to pay A$120 million ($79 million) to resolve the matter, aiming to address the reputational damage it has suffered.

As part of the settlement, Qantas will allocate A$20 million to compensate over 86,000 affected customers who had booked tickets for these "ghost flights." Additionally, the company will pay a fine of A$100 million instead of contesting the lawsuit, which it had previously indicated it would do.

This settlement, if approved by the court, will bring an end to a contentious issue that has negatively impacted Qantas's brand perception, prompting its CEO, Vanessa Hudson, to acknowledge the company's failure to meet its own standards. The CEO highlighted that resolving the case through this agreement will allow for quicker compensation to affected customers compared to prolonged litigation.

“We recognise Qantas let down customers and fell short of our own standards,” Vanessa Hudson said in a statement.

The Australian Competition and Consumer Commission (ACCC) chair, Gina Cass-Gottlieb, emphasized that the penalty imposed on Qantas serves as a strong deterrent for other companies. Despite the significant payout, it is noted that the settlement amount is considerably smaller than the anticipated net profit of A$1.47 billion forecasted for Qantas.

The compensation for affected customers includes A$225 for those who purchased tickets for domestic flights and A$450 for international flights, in addition to refunds. While this settlement is seen as a positive development for Qantas, the airline still faces unresolved legal matters, including compensation for ground handling staff dismissed in 2020. The lawsuit by the ACCC stemmed from a period following the reopening of Australia's borders in 2022, amidst global challenges faced by airlines due to COVID-19-related disruptions.

Qantas contended that it encountered similar obstacles as other airlines worldwide, but the ACCC deemed its actions as violations of consumer law, highlighting instances where tickets were sold for flights that had already been cancelled. As part of the settlement, Qantas has committed to refraining from repeating such conduct in the future.