Qantas Airways, Australia’s flagship airline, has recently agreed to a settlement of A$120 million with the Australian Competition and Consumer Commission (ACCC) over the sale of tickets for flights that had already been cancelled. This agreement follows a lawsuit filed by the ACCC against Qantas, claiming that the airline had sold tickets for so-called “ghost flights” to over 86,000 customers. As part of the settlement, Qantas will pay A$20 million to compensate affected customers and a A$100 million fine to the regulator.
The settlement comes at a time when Qantas is facing a significant reputational crisis. The airline’s brand value has plummeted in consumer surveys due to a spike in complaints about flight cancellations. This crisis was further exacerbated by the ACCC lawsuit, which led to the early retirement of Qantas’s long-serving CEO, Alan Joyce. The company’s current CEO, Vanessa Hudson, acknowledged that Qantas had let down its customers and failed to meet its own standards.
While the A$120 million settlement may seem like a significant amount, it pales in comparison to the A$1.47 billion net profit that analysts were expecting Qantas to report for the year. Despite this, the settlement is seen as a positive step towards resolving the reputational damage caused by the ghost flights scandal. Qantas’s shares remained flat following the announcement, indicating that investors were not significantly impacted by the settlement.
The ACCC lawsuit highlighted the challenges faced by airlines worldwide during the COVID-19 pandemic, including staffing shortages and flight cancellations. Qantas argued that it was not alone in facing these challenges, but the ACCC found that the airline’s actions had violated consumer law. As part of the settlement, Qantas has agreed not to repeat the conduct that led to the lawsuit.
Overall, the Qantas Airways settlement serves as a cautionary tale for companies that fail to meet their obligations to customers. It underscores the importance of transparency and accountability in the airline industry, particularly during times of crisis. Qantas’s willingness to take responsibility and compensate affected customers is a step in the right direction towards rebuilding trust and restoring its reputation in the eyes of the public.