Australian aviation giant and flag carrier Qantas is facing penalties amounting to over AUD$100 million (€61.5 million) after it sold tickets for non-existent flights. The settlement comes in the wake of a legal case brought by the Australian Competition and Consumer Commission (ACCC) in August last year, accusing the airline of selling tickets for so-called “ghost flights” or flights that had already been cancelled, sometimes for weeks. Though Qantas had previously promised to fight the case, it has now reached a deal with the ACCC and has agreed to make compensation payments to the 86,000 affected customers.
A significant penalty
The compensation payments, of A$225 (€138) for domestic flights and A$450 (€276) for international tickets, will go to customers who booked flights that were already cancelled and had been for at least two days. The total will come to an additional A$20 million (€12 million) on top of the penalty, if the plan gains approval from Australia’s Federal Court.
“We are pleased to have secured these admissions by Qantas that it misled its customers, and its agreement that a very significant penalty is required”, said ACCC Chair Gina Cass-Gottlieb, reacting to the settlement in a statement. She went on to note that the Qantas penalty “will send a strong deterrence message to other companies.”
Qantas is facing millions of dollar in fines over allegations it sold thousands of tickets on cancelled flights. @acccgovau Chair, Gina Cass-Gottlieb, explains these allegations. #9News pic.twitter.com/v4cLTK1fXM
— 9News Melbourne (@9NewsMelb) August 31, 2023
However, critics point out that the size of the settlement is a drop in the ocean compared to Qantas’s anticipated half-yearly results, due in June and expected to be as much as A$1.47 billion (€890 million) net profit, according to LSEG data.
Restoring confidence
Meanwhile, Qantas’ Chief Executive, Vanessa Hudson, described the outcome as “restoring confidence in the national carrier.” She entered the CEO role after the retirement of her predecessor with the carrier in turmoil and facing both industrial disputes and public anger due to a number of scandals, court cases and soaring air fares, delays and cancellations.
Appearing to place part of the blame for Qantas’s woes on Covid-19 and technical failures, she said these had now been addressed through better processes and investment, adding, “When flying resumed after the Covid shutdown, we recognise Qantas let down customers.”
Ghost flights are said to be an open secret in the aviation sector, with some airlines using the method to work around national laws on the routes they are able to operate. Last year, Qatar Airways was widely condemned for flying empty 354-seater planes between Melbourne and Adelaide in order to increase its flight quota.
