The ACCC walked back its claims against the airline about wrongful acceptance of payment for these flights, but Qantas agreed it should not have misled customers by advertising the flights even though it did not accept fees for no service.

“Our teams were focused on trying to minimise the disruption for our customers and move them to other flights, but we didn’t have the technology or the systems in place to support them, which meant that customers waited too long to be told that their flight had been cancelled,” Hudson said.

The total payout is less than half the $250 million in expected penalties when the ACCC first launched its claims against Qantas. The watchdog’s chair, Gina Cass-Gottlieb, last year said she sought the largest penalty against the airline to deter other companies from similar misdeeds.

Cass-Gottlieb told this masthead Qantas had behaved egregiously and that the settlement made clear that customers were entitled to feel they were owed their flight. She said the penalty agreed with Qantas reflected the airline’s willingness to accept its misdeeds, but that the ACCC would have pursued a higher penalty if the carrier had not withdrawn its defence.

“We’re confident all aspects of the settlement are sufficient,” Cass-Gottlieb said. “Qantas’ conduct was egregious and unacceptable. We expect that this penalty, if accepted by the court, will send a strong deterrence message to other companies.

“Regardless of the terms in the fine print, when a ticket is sold to a customer and they’re not notified their flight has been cancelled promptly, a reasonable Australian consumer is entitled to assume they continue to have a ticket with that flight and should be notified within a reasonable time to the contrary, so they can consider their options.”

Loading

She said the additional compensation was necessary, regardless of whether those affected had already been refunded or were re-accommodated on new flights. She said the ACCC had secured an enforceable commitment from Qantas to notify customers as soon as practicable in the event of a flight cancellation from now on.

“There are multiple contraventions here. Qantas did obtain benefits from their conduct, including in that those customers in effect by not being notified earlier may have otherwise sought carriage on another airline instead of being limited to taking re-accommodation with Qantas,” Cass-Gottlieb said.

Qantas said 94 per cent of the passengers affected were flying on domestic or trans-Tasman routes and 6 per cent were flying internationally. It said more than 80 per cent of passengers on the domestic routes were offered an alternative flight departing before or within three hours of their scheduled departure time. It said more than 60 per cent of the international passengers were offered an alternative flight which departed before or within 12 hours of the originally scheduled flight.

The watchdog’s allegations were one of a string of scandals that decimated Qantas’ ASX-listed share price at the end of last year and led to the early exit of the airline’s then chief executive officer, Alan Joyce, who announced he would retire two months ahead of schedule days after the case was launched.

Loading

RBC analyst Owen Birrell said the penalty would decrease the carrier’s earnings by less than 1 per cent, and the settlement was an “incremental positive, removing another post-COVID brand and valuation overhang from the stock”.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.