Commercial Law
Qantas to pay $120m settlement following ACCC “ghost flight” lawsuit
Qantas will begin making remediation payments of $225 to $450 to customers affected by its flight cancellation policy after settling its flight cancellation lawsuit with the ACCC, after the airline admitted it had misled passengers.
Legal action against Qantas initiated by the ACCC
The Australian Competition and Consumer Commission (ACCC) launched legal action against the airline in August 2023, claiming it sold tickets for 8000 “ghost flights” between May and July 2022.
Qantas’ ghost flight scandal centred on the airline’s sales of tickets for flights that had already been cancelled, failure to adequately notify customers of cancellation, and its offering of flight credits with an expiry for trips impacted by Covid-19.
Qantas was accused of taking an average of 18 days to notify ticket holders for 10,000 flights that their journeys had been cancelled.
In some cases, the ACCC alleged Qantas took up to 48 days to notify affected passengers.
In a settlement deal between Qantas and the ACCC, announced on 6 May 2024, affected customers will receive remediation payments of between $225 to $450. It is estimated to be a $20m initiative if approved by the Federal Court.
This will come alongside a $100m civil penalty against the national carrier.
The compensation scheme will affect more than 86,000 customers. As reported by Qantas, 94 per cent were flying domestically or on trans-Tasman routes, and 80 per cent of domestic passengers received alternative flight arrangements within three hours of their initial slated departure.
The response from Qantas and the ACC
In a public statement, Qantas said it intended to start its remediations before court approval. Qantas CEO Vanessa Hudson said:
“Today represents another important step forward as we work towards restoring confidence in the national carrier. When flying resumed after the Covid shutdown, we recognise Qantas let down customers and fell short of our own standards. We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry. We have since updated our processes and are investing in new technology across the Qantas Group to ensure this doesn’t happen again. We are focused on making the remediation process as quick and seamless as possible for customers.”
In a press conference, ACCC chair Gina Cass-Gottlieb said the commission was avoiding “legal semantics” by settling and that it valued securing reimbursement for customers.
“In the interest of getting an early settlement and the additional payments and compensation to customers, we are no longer taking forward a requirement that they admit to a contravention of selling the service and receiving payment with no intention of providing the service. It’s very interesting what legal semantics might be saying, what we consider as very important is that Qantas is admitting that it misled customers by continuing to sell tickets on flights they had already decided to cancel.”
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Julian Roffe
Practice Manager
Ezra Legal
