Alan Joyce and senior Qantas executives should have millions of dollars in bonuses withheld, its board has been urged after the airline conceded its reputation has been flamed and as momentum builds to investigate the airline’s special relationship with government. The Australian Shareholders’ Association chief executive, Rachel Waterhouse, said that if the company is serious about restoring public trust after the surprise launch last week of legal action by the consumer watchdog there needed to be a more immediate response from the airline’s board. The Australian Competition and Consumer Commission shocked Qantas on Thursday when it announced litigation alleging the airline sold tickets to more than 8,000 flights it had already cancelled. Waterhouse said given the court action could take some time to resolve, the chair, Richard Goyder, needed to step up now. “It’s a reputational issue and the board is responsible for managing that,” Waterhouse said. “There’s deterioration in the brand and also the share price. They might need to make some decisions to put bonuses on hold or reconsider their remuneration.” The issues facing Qantas are fast growing into a big business challenge for the airline that resembles the problems faced by Commonwealth Bank in 2017 over its handling of money-laundering allegations. In response, the then CBA chair, Catherine Livingstone, immediately axed senior executive bonuses, while others had their remuneration cut. “That’s the parallel of another organisation that did make significant changes when something came to light.” Shares in Qantas are being weighed down by the prospect of hundreds of millions of dollars in fines as well as reputational fallout, shedding more than 12% of their value in a month despite recently posting a record profit. Sign up for Guardian Australia’s free morning and afternoon email newsletters for your daily news roundup Observers have noted that the most straightforward way of docking the outgoing CEO, Alan Joyce’s remuneration would be withholding about $4m in bonuses he was previously set to be awarded. Earlier on Monday, John Sharp, the deputy chair of Rex Airlines and rival of Qantas, said the Qantas board would now have reason for reworking the millions of dollars in shares and bonuses Alan Joyce is poised to receive – his final pay packet could total $24m when he exits the role in November. “Qantas is, for the second year in a row, the most complained about company [to the ACCC] in Australia and I would have thought that would be a very important metric for a board to judge whether you issue bonuses to senior executives or not,” Sharp told ABC Radio. Meanwhile, the federal opposition is pushing for a Senate inquiry into the Albanese government’s decision to block Qatar Airway’s request for 28 additional weekly services to Australia’s four major gateways – Sydney, Melbourne, Perth and Brisbane. The opposition transport spokesperson, Bridget McKenzie, is proposing an inquiry to shed light on the Qatar decision, with the narrow scope designed to deliver a short and sharp inquiry that will put pressure on the transport minister, Catherine King, who has so far provided various reasons for the rejection while claiming it was taken in the “national interest”. Greens senators will seek to compel documents related to the Qatar decision, as they questioned whether ministerial intervention was designed to “protect Qantas profits”. It is understood the Greens party room will consider McKenzie’s Senate inquiry at its meeting on Tuesday. However, industry groups want a broader scope of inquiry to examine competition in Australian aviation, as there were allegations related to Qantas misusing slots uncovered by the ACCC’s investigation but which will not be part of the legal action. Sharp also accused Qantas of bullying smaller airlines, and said he hoped the ACCC’s legal action would bring about behavioural change. Multiple industry sources, who spoke on the condition of anonymity, were concerned the debate around Qantas was overly focusing on the Qatar decision because there is more political ammunition in targeting King. The government continued to defend questions about the influence of Qantas in its decision to block Qatar’s request in the House and Senate. Anthony Albanese denied playing a role in protecting Qantas from extra competition, and said that Joyce had not lobbied him personally on the issue. Pressure is also building from Flight Centre, which has launched an ad campaign against the Qatar decision, while Queensland’s deputy premier, Steven Miles, said he hoped “common sense prevailed” and the Qatar Airways decision was reversed to allow more flights to his state. The New South Wales premier, Chris Minns, and the Victorian government, insisted the issue was a matter for the commonwealth. Earlier on Monday, Qantas conceded its reputation had already been “hit hard on several fronts” before the consumer watchdog launched legal action and that “it will take time to repair” its standing in the eyes of Australians. In a lengthy statement Qantas said it was still reviewing the claims, but that “understandably, these allegations have caused significant concern among our customers, our people and the general community”. “The ACCC’s allegations come at a time when Qantas’s reputation has already been hit hard on several fronts,” the airline said. “We want the community to know that we hear and understand their disappointment. We know that the only way to fix it is by delivering consistently. We know it will take time to repair. And we are absolutely determined to do that.