Australia's competition regulator said it would block a pricing, code-sharing and scheduling deal between Qantas and Japan Airlines because it would likely mean higher fares for passengers
AFP / Saeed KHAN

In a largest settlement for a corporate penalty, the airline company Qantas has agreed to pay A$20 million to consumers for the sale of over thousands of tickets on already cancelled flights, and A$100 million as civil penalty to the federal government for breach of Australian Consumer Law.

According to The Guardian report, the airlines announced that it reached an agreement with the consumer watchdog, Australian Competition and Consumer Commission (ACCC), to resolve the lawsuit that was filed in August last year by compensating the passengers affected and pay $100 million as civil penalty, which is subject to the approval of the Federal Court of Australia.

The fine imposed is the biggest ever for an Australian airline and among the largest globally.

In a remediation program, Qantas will distribute the amount to more than 86,000 customers who had booked tickets on "ghost flights"— flights that had already been cancelled — with payments ranging from $225 for domestic customers to $450 for international customers, which would total to $20 million, ABC News reported.

"We recognise Qantas let down customers and fell short of our own standards," Qantas CEO Vanessa Hudson said in a statement.

Qantas brand value had taken a massive hit after a spike in complaints about cancellations, Reuters reported.

"This penalty ... will send a strong deterrence message to other companies," ACCC Chair Gina Cass-Gottlieb said in a statement, adding that Qantas has also undertaken to "not engage in this type of conduct in the future."

The airline company has also agreed to notify customers of cancelled flights within 48 hours from deciding to cancel the flight and to stop selling cancelled flights not later than 24 hours of its decision to cancel. It also applies to its low-cost subsidiary, Jetstar, The Guardian reported.