Qantas agrees to $66 million penalty in flight cancelation case

By Reuters   May 5, 2024 | 09:03 pm PT
Qantas agrees to $66 million penalty in flight cancelation case
Qantas Airways planes are parked at the domestic terminal at Sydney airport in Australia, July 1, 2017. Picture taken July 1, 2017. Photo by Reuters
Australian airline Qantas Airways said on Monday it had agreed to pay a penalty of A$100 million ($66 million) to settle a lawsuit that accused it of illegally selling thousands of tickets for flights that had already been canceled.

The penalty is subject to the approval of the Federal Court of Australia, it said in a statement.

As part of the settlement with Australian Competition and Consumer Commission (ACCC), Qantas will start an additional A$20 million remediation program for passengers affected by the cancelations, with each impacted customer receiving payments of between A$225 and A$450, the airline said.

"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 as a result of this conduct," ACCC Chair Gina Cass-Gottlieb said in a statement. "The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law."

Qantas was sued last August by the ACCC, which had alleged that in some cases, the airline's flights were on sale for several weeks after cancelation.

"When flying resumed after the Covid shutdown, we recognize Qantas let down customers and fell short of our own standards,' Qantas CEO Vanessa Hudson said.

"We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry."

Hudson said the airline had upgraded processes and was investing in new technology to avoid a repeat of the situation.

Qantas said the financial impact of the remediation program and penalty would be included as an expense in the group's full-year results for the financial year ending June 30 as an item outside the airline's key profit measure, underlying profit before tax.

The actual cash outflow for the remediation and penalty is expected to occur in the following financial year, the airline added.

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