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,
In a public statement, Qantas said it intended to commence its remediations prior to court approval.
Qantas CEO Vanessa Hudson said that 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.”
Ms Hudson assumed the company’s chief position when former CEO Alan Joyce quit ahead of his slated departure. Mr Joyce left in response to the flight sale allegations.
“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 service over 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.