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Qantas Agrees to Record Fine After Selling Tickets on Canceled Flights

Payouts to affected consumers will range from $225 to $450 Australian dollars (AUD).

Australian flag carrier Qantas Airways has agreed to pay a settlement equating $79 Million US Dollars (USD) in response to a lawsuit that the airline sold thousands of tickets for flights that were already cancelled, but not removed from the airline’s sales channels. 

More than 86,000 would-be passengers bought tickets on flights from May 2021 to July 2022 after the airline had cancelled them, according to the suit filed by the Australian Competition and Consumer Commission (ACCC). The ACCC alleged this behavior amounted to “false, misleading, or deceptive conduct” by advertising flights for sale that did not exist—and the airline did not intend to operate—at the time they accepted payment for the tickets. The ACCC also noted that during negotiations, Qantas ultimately admitted it continued the practice until late August of 2023—nearly a month after the ACCC first filed suit.

The fine is the largest ever imposed on an Australian airline. Qantas will use a portion of the money to pay compensation to passengers on top of refunds they have already received, but the bulk of the settlement will be a cash fine and a promise by Qantas not to engage in the activity again. Payouts to affected consumers will range from $225 to $450 Australian dollars (AUD).

The settlement amount is, however, not expected to materially impact the airline’s bottom line. Reuters reports that the airline’s projected net profit Qantas is expected to report when its fiscal year ends in June totals roughly $1.47 Billion AUD ($973M USD).

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In a prepared statement, Qantas CEO Vanessa Hudson took responsibility for the events that lead to the lawsuit and settlement, “Today represents another important step forward as we work towards restoring confidence in the national carrier.” 

She also noted that the technology issues that delayed removing the flights from booking channels has been addressed, “We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again.” 

A statement by the ACCC noted that Qantas and subsidiary Jetstar have agreed to inform passengers of future cancellations “as soon as practicable”—no more than 48 hours prior to the decision to cancel the flight. It has also agreed to stop selling flights as soon as practicable—or within 24 hours of the decision to cancel. It’s worth noting that the cancellations described are for future flights—not for cancellation decisions made for operational reasons on or near the day of travel.

The settlement requires the approval of the Australian Federal Court overseeing the suit, but as a show of good faith the airline intends to begin paying settlements to affected passengers—a move for which it does not need court approval. The Court’s signoff is required on the proposed $100M fine. 

In the same statement, Qantas thanked the ACCC for reaching a settlement that would allow them to compensate passengers more quickly than it could have if the suit had been heard in federal court, a statement that seems to contradict the fact that it intends to compensate those passengers before receiving the court’s approval under the proposed settlement terms. 

Qantas will be e-mailing affected customers—94 pecrcent of whom it says booked travel on domestic or New Zealand flights—with information on how they can file a claim for compensation. 

Founded in 1920, Qantas is the oldest airline in the English-speaking world. It is also regarded as having one of the best safety records of any airline in the world, having not suffered a fatal accident since 1951, and having no major hull-loss accidents since entering the jet age.