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Australia's biggest airline Qantas has agreed to pay a A$100m ($66.1m, £52.7m) penalty to settle a legal case accusing it of selling thousands of tickets for flights it had already cancelled.

Under the deal with the Australian Competition and Consumer Commission (ACCC), the firm will also launch a plan worth up to A$20m to compensate affected passengers.

Qantas' Chief Executive, Vanessa Hudson, said the move represented an important step toward "restoring confidence in the national carrier."

The so-called "ghost flight" case, which was launched by the ACCC in August, claimed that in some instances Qantas had sold tickets for flights that had been cancelled for weeks.

The penalty agreement between Qantas and the ACCC will now have to be approved by the Federal Court of Australia.

Under the plan, customers who bought tickets for flights that had already been cancelled for two or more days will be entitled to compensation.

According to the airline, they will receive A$225 for domestic flights and A$450 for international tickets.

"When flying resumed after the Covid shutdown, we recognise Qantas let down customers" said Ms Hudson, who said she had made it a priority to restore the airline's reputation when she was appointed to the job last year.

She also said the company had revamped its processes and invested in technology to avoid a repeat of the problem.

"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", ACCC Chair Gina Cass-Gottlieb said.

Qantas was facing a series of scandals and legal cases when Ms Hudson became the first woman to lead the airline.

Her predecessor, Alan Joyce, led the company through the 2008 financial crisis, the pandemic and record fuel prices.

However, by the time Mr Joyce stepped down in 2023, Qantas was facing growing public anger over expensive airfares, mass delays and cancellations, and its treatment of workers.