A “contrite” Qantas will pay a $100m penalty for selling thousands of tickets for cancelled flights, after a federal court judge said she would approve a settlement that ends the landmark legal action.

Australia’s biggest airline will pay an additional $20m to affected ticket holders as part of the agreement struck with the Australian Competition and Consumer Commission (ACCC).

In some cases, air fares were offered for up to 62 days after Qantas had decided to cancel a flight, the airline conceded.

“I’m satisfied that the sum of $100m is an appropriate penalty in the circumstances of this case,” Justice Helen Rofe said on Tuesday.

Qantas agreed to the settlement in May, after conceding it had misled consumers. The agreement required federal court approval.

In legal arguments today, barrister Ruth Higgins apologised on behalf of the airline.

“Qantas is sorry that it engaged in the conduct it has admitted in this proceeding,” Higgins said.

Higgins said Qantas was “contrite” and had expressed that regret by entering into a remediation program.

As part of the remediation, Qantas is paying about 86,000 affected customers between $225 and $450 each, on top of any previous refunds offered.

The new Qantas chief executive, Vanessa Hudson, said at the time of the settlement in May that it represented “another important step forward as we work towards restoring confidence in the national carrier”.

Qantas was contacted for comment on Tuesday.

The penalty is the largest the ACCC has ever imposed as part of a settlement. The record penalty for a breach of Australia’s consumer law was $125m, issued to Volkswagen in 2019 for deceiving customers over diesel emissions.

The ticket-selling revelations precipitated the early retirement of the former chief executive Alan Joyce.