Qantas settles flight cancellation lawsuit with $66 million penalty

Australian carrier Qantas Airways has reached a settlement in a lawsuit, agreeing to pay a penalty of A$100 million ($66 million) over allegations of illegally selling tickets for flights that were already cancelled, Reuters reports.

The airline disclosed on Monday that the settlement, subject to approval by the Federal Court of Australia, includes an additional A$20 million remediation program for affected passengers.

Under this program, impacted customers will receive compensation ranging from A$225 to A$450 each.

This resolution marks a step in addressing concerns raised by the Australian Competition and Consumer Commission (ACCC) regarding Qantas' conduct.

ACCC Chair Gina Cass-Gottlieb expressed satisfaction with the outcome, highlighting Qantas' acknowledgment of misleading its customers.

Cass-Gottlieb highlighted the importance of the proposed penalty, stating, "The size of this proposed penalty is an important milestone in enforcing the Australian Consumer Law."

The legal action against Qantas, initiated by the ACCC in August last year, alleged that the airline continued to advertise and sell flights even after their cancellation, prompting widespread customer dissatisfaction.

Qantas CEO Vanessa Hudson acknowledged the airline's shortcomings, particularly in providing timely cancellation notifications, and expressed apologies to affected customers.

Responding to the settlement, Qantas CEO Vanessa Hudson outlined measures taken to address the issues raised, including process upgrades and investments in new technology.

Hudson affirmed that the airline would take measure to prevent a recurrence of similar incidents in the future.

The financial implications of the remediation program and penalty will be reflected in Qantas' full-year financial results ending June 30, categorised as an expense outside the airline's key profit measure, underlying profit before tax.

However, the actual cash outflow is expected to occur in the subsequent financial year.

(With inputs from Reuters)