Qantas Settles ‘Ghost Flight’ Case with A$100m Penalty and Compensation Plan

Qantas, Australia’s largest airline, has reached a settlement in a legal case brought by the Australian Competition and Consumer Commission (ACCC), agreeing to pay a penalty of A$100 million ($66.1 million) over accusations of selling tickets for flights it had already cancelled, a practice dubbed “ghost flights.”

In addition to the penalty, Qantas will introduce a compensation plan valued at up to A$20 million to reimburse affected passengers, marking a significant step towards restoring confidence in the national carrier, according to Qantas’ Chief Executive, Vanessa Hudson.

The ACCC initiated the “ghost flight” case in August, alleging that Qantas had sold tickets for flights that were cancelled well in advance, leaving passengers stranded. The agreement between Qantas and the ACCC is subject to approval by the Federal Court of Australia.

Under the compensation plan, passengers who purchased tickets for flights cancelled for two or more days will be eligible for compensation, with amounts ranging from A$225 for domestic flights to A$450 for international tickets.

Ms. Hudson acknowledged the airline’s failure to meet customer expectations following the Covid-19 shutdown, emphasizing that restoring Qantas’ reputation has been a top priority since assuming her role last year. She noted that Qantas has implemented procedural changes and invested in technology to prevent similar issues from recurring.

ACCC Chair Gina Cass-Gottlieb welcomed Qantas’ acknowledgment of misleading customers and emphasized the necessity of a substantial penalty. Qantas faced various challenges and legal battles preceding Ms. Hudson’s appointment as CEO, including public outcry over airfare costs, operational disruptions, and labor relations.

Alan Joyce, Ms. Hudson’s predecessor, navigated Qantas through significant crises such as the 2008 financial downturn and the Covid-19 pandemic. However, by 2023, the airline faced mounting criticism over service reliability and employee treatment.

The settlement reflects Qantas’ commitment to addressing consumer grievances and marks a pivotal moment in its efforts to rebuild trust and accountability.