Qantas (QF, Sydney Kingsford Smith) has sidestepped a messy courtroom showdown and agreed to pay around 86,000 customers remediation amounts ranging between AUD225 and AUD450 Australian dollars (USD149-298) plus a AUD100 million (USD66 million) penalty for selling tickets on flights it had already cancelled but not disclosed, or was preparing to cancel.

It reached the agreement with the Australian Competition and Consumer Commission (ACCC) after the agency commenced legal action against the airline in September 2023. The settlement, which remains subject to ratification by Australia's Federal Court, was announced on May 6, 2024.

Qantas said the remediation programme will commence ahead of the court approval process. Qantas Group CEO Vanessa Hudson said the settlement was "another important step forward as we work towards restoring confidence in the national carrier."

The ACCC alleged that Qantas sold passengers tickets on more than 8,000 flights cancelled flights between May and July 2022 and that it continued selling tickets for an average of two weeks after cancelling the flights. In one case, it sold tickets on a flight for 47 days after axing it. In its initial defence filings, Qantas said it did not sell passengers tickets on any particular flight, instead selling a bundle of rights, and that the airline would do "its best to get consumers where they want to be on time."

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

However, Cass-Gottlieb also noted that Qantas had cooperated and agreed not to repeat this type of conduct. She said that in the future the carrier had also promised to notify customers of cancelled flights as soon as practicable and no more than 48 hours after deciding to cancel a flight. It has also undertaken to stop selling cancelled flights as soon as practicable and, in any event, within 24 hours of its decision. The undertaking also applies to its low-cost subsidiary Jetstar Airways (JQ, Melbourne Tullamarine).

Qantas says the impact of the remediation scheme and penalty will be recognised as an expense in the group’s statutory income statement for the year ended June 30, 2024. The expense will be recognised as an item outside of underlying profit before tax.