Australian airline Qantas agreed to pay 120 million Australian dollars (£62.9 million) in compensation and a fine for selling tickets on thousands of cancelled flights, the airline and Australia’s consumer watchdog said on Monday.

The Australian Competition and Consumer Commission sued the Sydney-based airline in the Federal Court last year.

The commission alleged that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been cancelled.

Qantas agreed to settle the suit by paying a 100 million Australian dollars (£52.6 million) fine to the Australian government and a projected 20 million Australian dollars (£10.3 million) to more than 86,000 affected customers.

“Today represents another important step forward as we work towards restoring confidence in the national carrier,” Qantas chief executive Vanessa Hudson said in a statement.

“When flying resumed after the COVID shutdown, we recognise Qantas let down customers and fell short of our own standards. We know many of our customers were affected by our failure to provide cancellation notifications in a timely manner and we are sincerely sorry,” Ms Hudson said, who replaced Alan Joyce at the airline’s helm in November last year.

A Federal Court judge has yet to accept the settlement.

ACCC chair Gina Cass-Gottlieb said Qantas’ payments to customers who bought tickets were in addition to other remedies already provided by Qantas, including alternative flights and refunds.

“We are pleased to have secured these admissions by Qantas that it misled its customers and its agreement that a very significant penalty is required as a result of this conduct,” Ms Cass-Gottlieb said in a statement.

“Qantas’ conduct was egregious and unacceptable. Many consumers will have made holiday, business and travel plans after booking on a phantom flight that had been cancelled,” she added.

Ms Cass-Gottlieb said Qantas also admitted its misconduct continued until August last year, more than a year longer than the regulator has alleged in court.

The regulator initiated the suit a week after Qantas posted a record profit for the fiscal year that ended June 30, 2023, following years of losses due to the pandemic.