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lite.cnn.com - on gopher - inofficial | |
ARTICLE VIEW: | |
Australia’s Qantas to pay $79 million to settle ‘ghost flights’ | |
case | |
Reuters | |
Updated: | |
4:43 AM EDT, Mon May 6, 2024 | |
Sydney — has agreed to pay 120 million Australian dollars ($79 | |
million) to settle a lawsuit over the sale of thousands of tickets on | |
already canceled flights, in an attempt to end a reputational crisis | |
that has engulfed the airline. | |
The company will split 20 million Australian dollars between more than | |
86,000 customers who booked tickets on the so-called “ghost | |
flights” and pay a fine of 100 million instead of defending the | |
lawsuit it had previously vowed to fight, Qantas and the Australian | |
Competition and Consumer Commission (ACCC) said on Monday. | |
The fine is the biggest ever for an Australian airline and among the� | |
largest globally in the sector, although some Australian banks and | |
casino operators have faced higher penalties. | |
“We recognize Qantas let down customers and fell short of our own | |
standards,” CEO Vanessa Hudson said in a statement. | |
The settlement “means we can compensate affected customers much | |
sooner than if the case had continued in the Federal Court,” added | |
Hudson, noting the court still must sign off on the settlement. | |
If the court approves, the settlement will resolve a dispute that | |
featured prominently at a time when Qantas’s brand value tanked in | |
consumer surveys amid a spike in complaints about cancellations. | |
After the ACCC filed its lawsuit last August, Hudson’s longserving | |
predecessor, , brought forward his retirement. Hudson became CEO in | |
September. | |
“This penalty … will send a strong deterrence message to other | |
companies,” ACCC Chair Gina Cass-Gottlieb said in a statement. | |
The payout, however, would pale against the net profit of 1.47 billion | |
Australian dollars that analysts on average forecast Qantas to report | |
in the year to end-June, according to LSEG data. | |
People who bought tickets on non-existent domestic flights would get | |
$225 and people with international fares would get $450, on top of a | |
refund, the airline and regulator said. | |
The ACCC lawsuit centered on the months after Australia’s border | |
reopened in 2022 following two years of Covid restrictions, and | |
airline cancellations and lost luggage complaints spiked globally amid | |
staffing shortages. | |
Qantas had argued that it faced similar challenges to airlines around | |
the world, but the ACCC said its actions broke consumer law. It had | |
said the airline sometimes sold tickets to flights weeks after they | |
were canceled. | |
The ACCC’s Cass-Gottlieb noted that the settlement included a promise | |
from Qantas not to repeat the conduct. | |
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