Qantas will pay $120 million in restitution and penalty for misleading customers by selling tickets to flights that had already been canceled.
The company plans to pay between $225 and $450 to affected domestic and foreign consumers for a projected total of about $20 million, and implement a remediation program for affected passengers. The rest of the settlement is a penalty.
Qantas announced Monday that it had settled with the Australian Competition and Consumer Commission (ACCC) over the ticket scheme, which led to the early retirement of former CEO Alan Joyce. Last August, the ACCC had filed a lawsuit accusing Qantas of advertising and selling tickets for over 8,000 flights that it had already canceled in its internal system.
It's the largest corporate penalty settlement the ACCC has ever approved. Volkswagen, however, was hit with the highest-ever fine for breaking Australia's consumer legislation in 2019 when it misled customers about diesel pollution, totaling $125 million.
The federal court must approve the proposed penalty, although Qantas will begin the remediation program ahead of the approval process.
According to ACCC head Gina Cass-Gottlieb, Qantas acknowledged that it had misled customers as part of the settlement.
Cass-Gottlieb said that Qantas' conduct was egregious and unacceptable. She noted that many consumers will have made holiday, business, and travel plans after booking a phantom flight that had been canceled.
She added that the company has also promised not to engage in this type of conduct in the future.
Furthermore, Qantas CEO Vanessa Hudson said that today represents another important step forward as they work towards restoring confidence in the national carrier.
She continued that they have since updated their processes and are investing in new technology across the Qantas Group to ensure this does not happen again.
