Australia's Qantas Airways has agreed to pay a record-breaking fine and compensation to settle lawsuits over the sale of thousands of tickets on already canceled flights. The airline let down its customers and fell short of its own standards by failing to provide cancellation notifications in a timely manner, according to the Australian Competition and Consumer Commission (ACCC).
The ACCC alleged that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been canceled. The airline admitted its misconduct continued until August last year.
Qantas will pay a civil penalty of A$100 million ($66 million) to the Australian government and a projected A$20 million ($13 million) in compensation to over 86,000 affected customers. Each customer will receive between $225 and $450, depending on their fare type.
The settlement is the largest ever for an Australian airline and among the largest globally in the sector. The fine sends a strong deterrence message to other companies about providing accurate information to consumers, according to ACCC Chair Gina Cass-Gottlieb.
Qantas CEO Vanessa Hudson acknowledged that her company let down customers and apologized for falling short of its own standards. She noted that the settlement means affected customers can receive compensation much sooner than if the case had continued in court.
The ACCC lawsuit came at a time when Qantas' brand value tanked in consumer surveys amid a spike in complaints about cancellations and lost luggage globally due to staffing shortages. The airline argued that it faced similar challenges to other airlines but the ACCC said its actions broke consumer law.
The settlement resolves a dispute that has engulfed Qantas in a reputational crisis, following years of losses due to the pandemic and record profits for the fiscal year ending June 30, 2023. The airline reported a profit of AU$1.74 billion ($1.13 billion) after taxes for the latest year.
