Qantas to pay $120m over ‘ghost flights’ but wins concession

However, in a significant win, the Flying Kangaroo said the ACCC is no longer proceeding with claims the airline received payment for flights it had no intention of providing – essentially removing the suggestion it deliberately misled consumers.

ACCC chair Gina Cass-Gottlieb said: “Qantas’ conduct was egregious and unacceptable. Many consumers will have made holiday, business and travel plans after booking a phantom flight that had been cancelled.

“We expect that this penalty, if accepted by the Court, will send a strong deterrence message to other companies.”

The ACCC announced in August last year it was taking Qantas to the federal court over the matter, which many believe contributed to the early exits of both CEO Alan Joyce and chairman Richard Goyder.

The new deal will see both parties ask the Federal Court to impose a penalty of $100 million on Qantas for breaching the Australian Consumer Law.

“Qantas has also agreed in a court-enforceable undertaking to pay about $20 million to more than 86,000 customers who were sold tickets on flights that Qantas had already decided to cancel, or in some cases who were re-accommodated on these flights after their original flights were cancelled,” said the ACCC.

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“Qantas will pay $225 to domestic ticketholders and $450 to international ticketholders. These payments are on top of any remedies these consumers already received from Qantas, such as alternative flights or refunds.”

The claims originally stated that between 21 May 2021 and 7 July 2022, Qantas advertised tickets for more than 8,000 cancelled flights.

It was also alleged that, for more than 10,000 flights scheduled to depart in May to July 2022, Qantas did not promptly notify existing ticketholders that their flights had been cancelled.

The airline subsequently admitted its misconduct continued from 21 May 2021 until 26 August 2023, affecting tens of thousands of flights scheduled to depart between 1 May 2022 and 10 May 2024.

“We acknowledge Qantas’ cooperation in ultimately deciding not to contest this case, admitting that the conduct occurred for a longer period, and seeking to resolve this early and for the benefit of consumers,” Cass-Gottlieb said.

Qantas has now undertaken to notify customers of cancelled flights as soon as practicable, and no more than 48 hours from deciding to cancel the flight. It has also undertaken to stop selling cancelled flights as soon as practicable.

Qantas Group CEO Vanessa Hudson said, “Today represents another important step forward as we work towards restoring confidence in the national carrier.

“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards. We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry. The return to travelling was already stressful for many and we did not deliver enough support for customers and did not have the technology and systems in place to support our people.

“We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again.

“We thank the ACCC for their cooperation in reaching this outcome, which means we can compensate affected customers much sooner than if the case had continued in the Federal Court. We are focused on making the remediation process as quick and seamless as possible for customers.”

Qantas had appeared to hint it would fight the claims in October last year, saying the ACCC’s case ignored the “fundamental reality” of flight schedules.

The Flying Kangaroo added that it was “impossible” for any airline to guarantee that a service would operate at its scheduled time and that it instead aimed to get customers to their destinations as quickly as possible.

If accepted, the $120 million deal would also be significantly less than the $250 million fine initially hinted at by ACCC chair Gina Cass-Gottlieb.