AUSTRALIAN flag carrier Qantas has agreed to pay a fine of US$66 million as part of a resolution to a contentious "ghost flights" scandal, reports Dubai's Gulf News.

The airline faced allegations of continuing to sell seats on flights that had long been cancelled.

Australia's competition watchdog revealed that Qantas acknowledged misleading consumers by promoting seats on tens of thousands of flights despite these flights being cancelled.

Additionally, Qantas will allocate $13 million to compensate 86,000 affected travellers for the disruptions and mishandled rescheduling.

"Many consumers will have made holiday, business, and travel plans after booking on a phantom flight that had been cancelled," said Australian competition and consumer chairwoman Gina Cass-Gottlieb.