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Qantas passengers who booked flights on already cancelled services will receive up to $450 each after the Federal Court approved a compensation deal agreed with the ACCC.
Justice Helen Rofe signed off on the settlement reached in May, which will see the Flying Kangaroo pay a pecuniary penalty of $100 million and compensate passengers up to $20 million in total.
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The airline will pay $225 to domestic ticketholders and $450 to international ticketholders, on top of any accommodations already made, including alternate flights and refunds.
The so-called ghost flight controversy emerged last year and is thought to have led to the early exit of then-CEO Alan Joyce. However, a deal with the ACCC earlier this year saw the regulator drop claims the airline deliberately misled customers.
Appearing on behalf of the ACCC, Christopher Caleo KC said in court Qantas has also begun to implement changes to its system to ensure “the contravening conduct does not occur in the future”. This will include its subsidiary budget airline, Jetstar.
“Qantas has stated that as a large publicly-listed company with significant financial resources, [the penalty] must send a clear signal to other companies in Australia that contraventions of the Australian Consumer Law (ACL) cannot be tolerated and there are serious consequences for such contraventions,” Caleo said.
Between 21 May 2021 and 26 August 2023, Qantas advertised tickets for more than 8,000 flights and did not promptly notify existing ticketholders of a further 10,000 flights that had been cancelled.
By doing so, the airline engaged in misleading or deceptive conduct, made false or misleading representations, and engaged in conduct liable to mislead the public in breach of the ACL.
ACCC chair Gina Cass-Gottlieb said she was pleased not only to secure an admission by Qantas but also to come to an agreement “that a very significant penalty is required as a result of this conduct”.
Referring to that penalty, Caleo said it would not only deter others from contravening the ACL but also send a message to other large corporations that it is not “a mere cost of doing business”.
However, the penalty was softened due to Qantas’ co-operation.
“Without that cooperation, the total sought by the commission would have been significantly higher,” Caleo said.
On behalf of Qantas, Dr Ruth Higgins SC said the airline was “sorry it engaged in conduct that is admitted in this proceeding”.
She added Qantas has since “designed, implemented and committed to whole-of-business improvements concerning cancellations”.
The ACCC has warned affected ticketholders that scammers have used a media release to trick them into making payments. It advised hanging up immediately and reporting any payments made.
