ACCC launches legal action against Qantas over tickets

It's also alleging the airline didn't notify existing ticket holders for 10,000 flights that they had been cancelled for an average of 18 days, and up to 48 days, between May and July 2022.

This left customers less time to make alternative arrangements and may have led them to pay higher prices.

The ACCC said Qantas continued to sell tickets for the flights on its website for two days or more and delayed informing ticketholders their flights were cancelled for the same period of time for about 70 per cent of cancelled flights.

Qantas cancelled a quarter of its flights between May and July 2022, which amounted to about 15,000, the watchdog said.

Chair Gina Cass-Gottlieb said the commission had conducted a detailed investigation into the airline.

"As a result, we have commenced these proceedings alleging that Qantas continued selling tickets for thousands of cancelled flights, likely affecting the travel plans of tens of thousands of people," she said.

"This case does not involve any alleged breach in relation to the actual cancellation of flights, but rather relates to Qantas' conduct after it had cancelled the flights."

The ACCC is seeking penalties, injunctions, declarations and costs.

Treasurer Jim Chalmers said they were "deeply concerning allegations".

"This is the consumer watchdog doing its job and a reminder that businesses need to do the right thing by people - breaches of consumer law carry heavy penalties," Dr Chalmers said in a statement.

The government has initiated a competition review and aviation white paper to identify issues in the sector which need fixing.

The federal opposition is also pursuing the government over a decision to block Qatar Airways from boosting the number of flights into the country - a move described by critics as protecting Qantas.