Qantas to dish out $120 million over ghost flights

The competition watchdog announced on Monday the parties had agreed to ask the court to impose the penalty.

More than 86,000 customers who were sold tickets Qantas had already decided to cancel with share $20 million.

Qantas will pay $225 to domestic customers and $450 to international ones.

"Qantas' conduct was egregious and unacceptable," ACCC chair Gina Cas-Gottlied said in a statement.

"Many customers will have made holiday, business and travel plans after booking on a phantom flight that had been cancelled."