Sydney — Qantas Airways has consented to a 120 million Australian dollar ($79 million) settlement to close a legal battle concerning the sale of numerous tickets for flights that had already been canceled, aiming to salvage its reputation after this issue significantly affected the company.

Qantas, along with the Australian Competition and Consumer Commission (ACCC), announced on Monday that it would distribute 20 million Australian dollars among over 86,000 passengers who purchased tickets for these nonexistent "ghost flights," and will pay a 100 million Australian dollar penalty instead of contesting the lawsuit which it initially promised to challenge.
This penalty marks the largest ever imposed on an Australian airline and ranks among the highest worldwide in the aviation industry, though penalties for Australian banks and gaming companies have been greater.
Vanessa Hudson, the CEO of Qantas, acknowledged in a statement that the airline did not meet its standards and disappointed its customers.
Hudson further explained that settling would allow for quicker compensation to the impacted customers than if the proceedings had extended in the Federal Court, though the court's approval is still pending.
Should the court green-light the settlement, it would settle a dispute that became highly visible during a period when Qantas's brand value suffered in market surveys due to a surge in cancellation complaints.
Following the ACCC's lawsuit initiation last August, Hudson's predecessor, Alan Joyce, expedited his retirement, with Hudson assuming the role of CEO in September.
ACCC Chair Gina Cass-Gottlieb stated that this significant penalty would serve as a strong deterrent to other corporations.
Nevertheless, the payout is minor compared to the expected net profit of 1.47 billion Australian dollars for Qantas for the year ending in June, as projected by LSEG.
Customers who purchased tickets for the nonexistent domestic and international flights will receive $225 and $450 respectively, in addition to refunds, as stated by both the airline and the regulator.
The lawsuit by the ACCC focused on the period following the reopening of Australia's borders in 2022 after two years of COVID-19 restrictions, during which global airline operations were disrupted by cancellations and lost luggage issues due to staff shortages.
While Qantas claimed to be facing global industry challenges, the ACCC argued that the airline's practices violated consumer laws, often selling tickets for flights long after their cancellation.
Cass-Gottlieb of the ACCC highlighted that the settlement also includes Qantas's commitment to avoid repeating such practices in the future.