Qantas to pay passengers up to $450

Qantas and the ACCC have settled their legal action over the airline’s flight cancellation policy. Picture: NCA NewsWire / Ben Clark

Qantas will pay out up to $450 in compensation to customers affected by its flight cancellation policy, after the airline admitted it had misled passengers.

The Australian Competition and Consumer Commission (ACCC) launched legal action against the airline in August 2023, claiming it sold tickets for 8000 “ghost flights” between May and July 2022.

Qantas’ ghost flight scandal centred on the airline’s sales of tickets for flights that had already been cancelled, failure to adequately notify customers of cancellation, and its offering of flight credits with an expiry for trips impacted by Covid-19.

Qantas was accused of taking an average of 18 days to notify ticket holders for 10,000 flights that their journeys had been cancelled.

In some cases, the ACCC alleged Qantas took up to 48 days to notify affected passengers.

In a settlement deal between Qantas and the ACCC, announced on Monday, affected customers will receive remediation payments of $225 to $450. It is estimated to be a $20m initiative if approved by the Federal Court.

This will come alongside a $100m civil penalty against the national carrier,

Qantas CEO Vanessa Hudson apologised to customers and said she hoped the settlement would restore confidence in the airline. Picture: NCA NewsWire / Luis Ascui

In a public statement, Qantas said it intended to start its remediations before court approval.

Qantas CEO Vanessa Hudson said the company did provide adequate support to customers.

“Today represents another important step forward as we work towards restoring confidence in the national carrier,” Ms Hudson said.

“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.

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

“We are focused on making the remediation process as quick and seamless as possible for customers.”

ACCC chair Gina Cass-Gottlieb. Picture: NCA NewsWire / Christian Gilles
Qantas Chief Alan Joyce
Former Qantas CEO Alan Joyce. Picture NCA NewsWire / Aaron Francis

Ms Hudson assumed the company’s chief position when former CEO Alan Joyce quit ahead of his slated departure after the flight sale allegations were made.

“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,” Ms Hudson said.

“We thank the ACCC for their co-operation in reaching this outcome.”

The compensation scheme will affect more than 86,000 customers. As reported by Qantas, 94 per cent were flying domestically or on trans-Tasman routes, and 80 per cent of domestic passengers received alternative flight arrangements within three hours of their initial slated departure.

In a press conference, ACCC chair Gina Cass-Gottlieb said the commission was avoiding “legal semantics” by settling and that it valued securing reimbursement for customers.

“In the interest of getting an early settlement and the additional payments and compensation to customers, we are no longer taking forward a requirement that they admit to a contravention of selling the service and receiving payment with no intention of providing the service,” Ms Cass-Gottlieb said.

“It’s very interesting what legal semantics might be saying, what we consider as very important is that Qantas is admitting that it misled customers by continuing to sell tickets on flights they had already decided to cancel.”

The Federal Court will now be asked to decide if the $100m penalty against Qantas is a suitable legal outcome. Picture: NCA NewsWire / Ben Clark

“This was egregious and unacceptable conduct by Qantas, many Australian families and business travellers made plans after booking plans on phantom flights.

“This $100m penalty, if accepted by the Federal Court, will send a strong message to Australian companies that they must comply with the Australian Consumer Law.

“The ACCC assures the community that we take action to make sure that businesses communicate clearly, accurately and honestly with their customers at all times.”