Qantas Airways Settles Lawsuit Over “Ghost Flights” for $120 Million

Qantas Airways Settles Lawsuit Over “Ghost Flights” for $120 Million

In a move to resolve a reputational crisis that has plagued the airline, Qantas Airways has agreed to pay A$120 million ($79 million) to settle a lawsuit brought by regulators over the sale of tickets for flights that had already been cancelled. The settlement includes a payment of A$20 million to more than 86,000 affected customers and a A$100 million fine. This decision comes after Qantas had previously vowed to fight the lawsuit, but ultimately chose to reach a settlement with the Australian Competition and Consumer Commission (ACCC).

Vanessa Hudson, the CEO of Qantas Airways, acknowledged that the company had let down its customers and failed to meet its own standards. She emphasized that the settlement would allow Qantas to compensate affected customers much sooner than if the case had continued in court. Hudson, who took over as CEO in September, expressed a commitment to resolving the issue and improving the airline's reputation moving forward.

The A$120 million settlement represents the biggest fine ever imposed on an Australian airline and is among the largest globally in the aviation sector. While the payout will impact Qantas financially, it is important to note that the airline was still expected to report a net of A$1.47 billion in the current financial year. The market reaction to the settlement was relatively muted, with Qantas shares trading flat compared to a small gain in the overall Australian market.

According to RBC Capital Markets analyst Owen Birrell, the settlement is viewed as a positive for Qantas, as it removes a overhang on the company's brand and valuation post-COVID. While the financial impact of the settlement is significant, it is seen as a necessary step for Qantas to address the issues stemming from the sale of “ghost flights” and regain the trust of its customers.

The lawsuit brought by the ACCC against Qantas highlighted the importance of transparency and compliance with consumer protection laws. The regulator's findings suggested that Qantas had sold tickets for flights that were no longer operational, leading to a spike in complaints and dissatisfaction among customers. The settlement includes a commitment from Qantas to avoid similar conduct in the future, signaling a renewed focus on ethical business practices and customer satisfaction.

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Overall, the resolution of the lawsuit over “ghost flights” represents a significant milestone for Qantas Airways in addressing past failures and rebuilding its reputation. By acknowledging its mistakes, taking responsibility, and compensating affected customers, Qantas has taken a step towards restoring trust and credibility in the eyes of the public.

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