Qantas to Pay $66M Fine Over Ghost Flights Scandal

Qantas has agreed to settle the ghost flight debacle. The Australian airline has agreed reached a settlement to pay a hefty penalty of $66 million, following the scandal, where the airline was accused of selling seats continuously on flights long after they had been canceled. According to reports, the settlement also includes an additional $13 million set aside for providing as compensation to the 86,000 costumers who had been affected by the cancellations and subsequent rescheduling of the flights.

The Order

The Australian Competition and Consumer Commission (ACCC) said that Qantas had reportedly admitted to have deceived customers. The commission stated that the airline “admitted that it misled consumers” by advertising seats on tens of thousands of flights, despite the fact that these flights had been canceled long ago. ACCC chairperson Gina Cass-Gottlieb condemned Qantas’ actions as “egregious and unacceptable,” highlighting the grave impact that the deception had on consumers who had made their travel plans based on bookings for flights that no longer existed.

What Qantas Said

Qantas CEO Vanessa Hudson expressed regret over the airline’s shortcomings, acknowledging that the company had failed to meet its own standards and had disappointed its customers. Hudson while addressing the company’s failure, pressed that many customers of the airlines had been gravely affected by the lack of timely notification about the  cancellation of their flights. The CEO went on to issue a sincere apology on behalf of the airline.

The $66 million fine is equal to Aus$100 million and depends on the approval from the court. This settlement marks a significant step in resolving the fallout from the “ghost flights” controversy that has tarnished the airlines' reputation. It had earlier faced criticism over steep ticket prices, allegations of subpar service quality, and the dismissal of 1,700 ground staff during the Covid-19 pandemic.

Qantas had earlier defended its practice of selling seats on canceled flights, saying that customers purchase a “bundle of rights” rather than specific seats, the settlement underscores the importance of transparent and ethical business practices in the airline industry.

Despite the turbulence caused by the Covid-19 pandemic, Qantas managed to post a substantial annual profit of $1.1 billion last year, signaling a stunning financial recovery. The departure of veteran CEO Alan Joyce, announced amidst a wave of criticism in September last year, marked a pivotal moment for the airline as it navigates its path forward.