Qantas to begin $20m compo scheme for customers impacted by ‘ghost flights’ scandal

Qantas will start contacting customers eligible for up to $450 in compensation after it sold thousands of tickets on flights which had already been cancelled.

Qantas will on Sunday begin to contact customers eligible for a share of $20m in compensation for selling thousands of tickets on so-called ghost flights that had already been cancelled.

Under an agreement reached last month with the Australian Competition and Consumer Commission, Qantas will email customers who made a booking two or more days after Qantas decided to cancel that flight.

The $20m program will be open to more than 86,000 customers who were booked on flights scheduled to depart between May 1, 2022 and May 10, 2024.

A Qantas spokesman told The Weekend Australian the program was a step toward rebuilding trust from customers. This week Qantas plunged seven spots to 24th for customer satisfaction in the industry benchmark Skytrax Awards.

“We know we let a lot of people down by not processing cancelled flights quickly enough, and this program is another important step as we rebuild trust with our customers,” Qantas said. “We’ve updated our processes and are investing in technology to ensure this doesn’t happen again.”

Affected customers will receive $225 for domestic or trans-Tasman flights and $450 for international flights. This is on top of any refund or alternative flight already offered to these customers.

The booking period in question extended from May 21, 2021 to August 26, 2023, with the cancelled flights occurring between May 1, 2022 and May 10, 2024.

It hasn’t been all smiles among Qantas customers who have sent its reputation plummeting in the Skytrax Awards.

As agreed with the ACCC, customers have until 7 May, 2025 to claim their payment. After this date, any unclaimed payments will be donated to charity.

The ACCC and Qantas will seek approval of the proposed $100m penalty by the Federal Court later this year. The competition watchdog settled with the country’s largest airline last month.

ACCC chair Gina Cass-Gottlieb last month said Qantas’ senior managers knew the airline’s systems were not capable of informing customers in a timely fashion about cancelled flights, resulting in the sale of tickets on flights that did not exist.

Ms Cass-Gottlieb, who had been seeking a penalty in excess of $250m, said the settlement reached was effectively a “discount” for Qantas’ co-operation and admission of guilt.

Qantas said while some senior managers were aware there were deficiencies in different aspects of the systems and processes they were responsible for, the ACCC agreed that no one person was aware of all of these matters.

Qantas chief executive Vanessa Hudson conceded customers had been misled but pointed out the ACCC had dropped its claim that the airline took payment for no service, saying all of those affected were put on new flights or given a refund.

In some instances customers were not told for 60 days after booking that their flight had been cancelled, and on average customers were not informed for 11 days after cancellation.

From now on, Qantas would be required to notify customers of a flight cancellation no more than 48 hours after the cancellation was made and stop selling tickets within 24 hours of the decision to cancel.

The $120m cost to Qantas would be recognised as an expense in the group’s annual results outside of underlying profit before tax. The cashflow impact would not occur until the 2025 financial year.

Customers who believe they may have been impacted but have not yet received an email are advised to wait until July 10 when all emails have been sent before contacting Deloitte’s support team.