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Airline Fined $66 Million for Selling Seats on Cancelled Flights

Qantas, Australia's largest airline, has agreed to pay a hefty $66-million penalty to settle a legal dispute stemming from the sale of tickets for flights that were later cancelled. Dubbed the 'ghost flights' case, this legal battle saw customers who had purchased tickets for flights cancelled two or more days beforehand eligible for compensation.

The Australian Competition and Consumer Commission (ACCC) initiated the case against Qantas in August last year, alleging deceptive practices in selling tickets for flights that had already been cancelled weeks prior. These flights, termed "ghost flights," led to substantial inconvenience and financial loss for affected passengers.

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Under the terms of the settlement, Qantas will not only pay the significant penalty but also introduce a compensation scheme valued at up to A$20 million to reimburse affected passengers. This move is seen as a critical step by Vanessa Hudson, Qantas' Chief Executive, towards rebuilding trust in the airline among consumers.

The ACCC characterized Qantas' actions as "egregious and unacceptable," emphasizing the impact on consumers who made travel plans based on misleading flight bookings. As part of the compensation plan, domestic passengers affected by cancelled flights will receive A$225, while international ticket holders will receive A$450.

Vanessa Hudson, who recently assumed the role of Qantas' Chief Executive, acknowledged the airline's shortcomings in handling the situation and pledged improvements in processes and technology to prevent similar incidents in the future.

The settlement agreement between Qantas and the ACCC awaits approval from the Federal Court of Australia. ACCC Chair Gina Cass-Gottlieb expressed satisfaction with Qantas' admission of misleading conduct and emphasized the necessity of a substantial penalty in this case.

This legal saga adds to the challenges faced by Qantas in recent times, including public scrutiny over airfare pricing, operational delays, and cancellations. Vanessa Hudson's leadership comes at a crucial juncture as she navigates the airline through these issues, aiming to restore its reputation and regain consumer trust.

As the aviation industry grapples with the aftermath of the pandemic and strives for recovery, Qantas' commitment to addressing consumer grievances and upholding transparency in its operations remains paramount.

May 6, 2024 5:05 p.m. 5176

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