Qantas Airways will pay 120 million Australian dollars to settle a lawsuit over the sale of tickets for canceled flights, in an attempt to address the reputational crisis that has impacted the airline. The settlement will see the company distributing 20 million Australian dollars among over 86,000 affected customers who booked tickets on these flights. In addition, Qantas will pay a 100 million Australian dollar fine instead of continuing to fight the lawsuit. This is the largest fine ever imposed on an Australian airline and among the largest globally in the sector.
CEO Vanessa Hudson acknowledged that Qantas had let down customers and fallen short of its standards. The settlement will allow the airline to compensate affected customers much sooner than if the case had continued in court. Should the settlement be approved by the court, it will resolve a dispute that contributed to a decline in Qantas’s brand value and an increase in customer complaints about cancellations. After the Australian Competition and Consumer Commission (ACCC) filed the lawsuit, former CEO Alan Joyce expedited his retirement, with Hudson taking over in September.
The ACCC Chair Gina Cass-Gottlieb stated that the penalty imposed on Qantas would send a strong message to other companies. While the payout is significant, it is considerably less than the net profit forecasted for Qantas in the current financial year. Customers who purchased tickets for non-existent domestic flights will receive $225, while those with international fares will receive $450 in addition to a refund. The lawsuit was centered on the period after Australia’s border reopened following Covid restrictions, during which cancellations and lost luggage complaints increased globally.
Qantas had cited challenges similar to those faced by airlines worldwide, such as staffing shortages, to explain the cancellations. The ACCC, however, contended that the airline’s actions violated consumer law, including selling tickets for flights that had already been canceled. As part of the settlement, Qantas has committed not to repeat this conduct in the future. The agreement between Qantas and the ACCC highlights the importance of adhering to consumer protection laws in the airline industry and addresses the issues that arose from the sale of tickets for ghost flights.
The settlement represents a significant effort by Qantas to address its shortcomings and compensate affected customers while avoiding further legal battles. By accepting responsibility and agreeing to the terms of the settlement, Qantas aims to restore customer trust and improve its reputation. The resolution of the lawsuit will allow the airline to move forward and focus on rebuilding its brand value and restoring consumer confidence. Qantas’s commitment to making amends for its past mistakes and adhering to consumer protection laws sets a positive example for the industry and emphasizes the importance of accountability and integrity in business practices.
