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Qantas Settles Flight Cancellation Dispute with Landmark $66 Million Penalty Agreement

“Qantas Agrees to A$120 Million Settlement in ‘Ghost Flights’ Saga, Aiming to Mend Reputation Amidst Crisis”

Qantas Airways has reached a landmark agreement, opting to pay A$120 million ($79 million) to resolve a regulatory lawsuit over the controversial sale of tickets for flights that had been previously canceled. This move signals a concerted effort by the airline to address a reputational crisis that has cast a shadow over its operations.

Under the terms of the settlement, Qantas will allocate A$20 million to compensate over 86,000 affected customers who booked tickets for the so-called “ghost flights.” Additionally, the airline will pay a hefty A$100 million fine, choosing to forgo a protracted legal battle with the Australian Competition and Consumer Commission (ACCC).

The fine, the largest ever imposed on an Australian airline, underscores the gravity of the situation for Qantas. While some may compare it to penalties faced by other sectors, including banks and casinos, for breaches of the law, it remains a significant blow to Qantas’s bottom line.

CEO Vanessa Hudson expressed regret over the airline’s failure to meet customer expectations, acknowledging that Qantas had fallen short of its own standards. The settlement, according to Hudson, will expedite compensation for affected customers, offering resolution sooner than a prolonged court battle would allow.

Despite the substantial financial impact, Qantas shares showed resilience, trading slightly higher in line with the broader Australian market. Analysts view the settlement as a positive step, alleviating post-COVID brand concerns and potential valuation pressures on the stock.

However, challenges persist for Qantas, including ongoing legal battles such as the pending compensation for ground handling staff laid off in 2020. The lawsuit with the ACCC stemmed from a tumultuous period following Australia’s border reopening in 2022, marked by widespread flight cancellations and passenger complaints amidst global staffing shortages.

While Qantas attributed its actions to industry-wide challenges, the ACCC contended that the airline had violated consumer protection laws by selling tickets for canceled flights. The settlement includes a commitment from Qantas to refrain from similar conduct in the future, signaling a commitment to uphold consumer rights and restore trust in the airline’s operations.

Sadhna B

Sadhna B

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