Airline sold seats on cancelled flights, now has to pay $66-million fine

Qantas Airways, Australia’s largest airline, sold seats on non-existent flights and will have to pay a massive penalty. Qantas, which had booked seats on flights that had been cancelled weeks in advance, has agreed to pay an Australian dollar 100 million ($66.1m) penalty to settle the case. The Australian consumer commission launched a case against Qantas in August last year, referring to it as the “ghost flight” case.

Customers who purchased tickets from Qantas airlines on flights cancelled two or more days in advance will get compensation in this case.

The Australian Competition and Consumer Commission (ACCC) brought the case against Qantas, alleging that the airlines sold tickets for flights that had been cancelled weeks prior and labelling them as “ghost flights”.

Under the settlement deal, Qantas will also roll out a compensation plan worth up to A$20 million to compensate the affected passengers.

Vanessa Hudson, Qantas’ Chief Executive, said the move represented an important step toward “restoring confidence in the national carrier”, reported BBC.

The ACCC launched the “ghost flight” case in August, claiming that Qantas had misled customers by selling tickets for flights that were cancelled for weeks.

The Federal Court of Australia must approve the penalty agreement between Qantas and the Australian Competition and Consumer Commission (ACCC).

“Qantas’ conduct was egregious and unacceptable. Many consumers will have made holiday, business and travel plans after booking on a phantom flight that had been cancelled,” said ACCC Chairperson Gina Cass-Gottlieb.

Under the compensation plan, customers who purchased tickets for flights cancelled two or more days in advance would be eligible for compensation.

Domestic flight passengers will receive A$225, while international ticket holders will receive A$450, according to the BBC.

“When flying resumed after the Covid-19 shutdown, we recognise Qantas let down customers”, said Hudson, Qantas Airlines Chief Executive.

She emphasised efforts to improve processes and invest in technology to prevent similar issues in the future.

“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”, ACCC Chair Gina Cass-Gottlieb was quoted as saying by the BBC.

Hudson, who became the first woman to lead Qantas Airlines, took over as Chief Executive Officer (CEO) amid a series of scandals and legal challenges faced by the airline.

Her predecessor, Alan Joyce, navigated Qantas through multiple crises, including the 2008 financial crisis and the pandemic, but the airline encountered public backlash over expensive airfares, widespread delays, cancellations, and employee treatment by the time of his departure in 2023.