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Most flight cancellations have a simple cause: weather. But there are also times when airlines are at fault, and since COVID-19 passengers have had to wait longer to be rebooked on a new flight in the event of a cancellation or delay. This is because there are fewer services operating than before the pandemic, which means there are fewer seats available. This scarcity has pushed up the cost of airfares, helping airlines fill their coffers.
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What are your rights?
Tickets are often categorised into a specific fare class, which may determine the level of flexibility offered (as outlined by the terms of conditions and contract of sale).
Regardless of the fare class, all consumers are protected by Australian Consumer Law. That means airlines are bound to abide by consumer guarantee obligations and cannot contravene these entitlements within their policies.
Under consumer law, customers must be provided a service within a “reasonable time”. Whether consumer law has been breached in the event of a flight cancellation depends on if the airline caused the cancellation and how long it took to rebook the flight. Often, travellers and airlines disagree on what constitutes a “reasonable” time for booking a new flight, and policies can vary between carriers.
In the EU, passengers are entitled to between €250 and €600 if their flight is delayed by more than three hours.Credit: AP
What are your options in the event of an airline dispute?
A number of bodies enforce consumer law in Australia, but there is no scheme in place with the power to force a dispute resolution when it comes to flying.
If a complaint has been lodged with an airline but has not been resolved, customers are often referred to the Airline Customer Advocate, which is funded by and reports to participating airlines – Qantas, Virgin Australia, Regional Express and Jetstar.
This free service essentially packages a complaint and alerts the airline concerned, but requires passengers to have already attempted resolution with the carrier directly. It cannot do much beyond alerting the airline of a complaint and instructing it to respond within 20 days.
The Airline Customer Advocate has been extensively criticised by consumer law advocates and members of the aviation industry for not being fit for purpose. In 2021, the free service was issued a shonky award by CHOICE which accused it of functioning as a glorified post box instead of an emboldened dispute resolution service.
It has not released its annual report with details of customer complaints since 2021 and says it’s in the process of an ongoing investigation due to “inaccuracies” in the data for 2022.
Customers could also contact the Australian Competition and Consumer Commission (ACCC) about a dispute with an airline, but its role is to ensure businesses are compliant with consumer law on a structural level. It does not handle individual complaints.
However, if the ACCC receives overwhelming evidence of alleged breaches of consumer law it will intervene.
The ACCC recently lodged legal action against Qantas after it was contacted by passengers who alleged the business had sold tickets on cancelled flights in 2022. These complaints unlocked the ACCC’s investigation, where it revealed more than 8000 tickets to “ghost flights” had been sold between May and July last year.
Customers may engage their relevant state-based fair trading service or lodge legal action in local or small claims courts, but these mechanisms can be cumbersome, expensive and come with complications as airline disputes generally involve a number of states or countries that are governed by different services.
What do consumer experts say?
Consumer bodies such as the ACCC and CHOICE have called for the establishment of an independent ombudsman with the powers to force a resolution in line with consumer law.
ACCC commissioner Anna Brakey said there was a clear need for consumer protection reform so that it becomes illegal for businesses to fail to remedy consumer law breaches.
“When you put the issues and expense associated with pursuing an airline through the local courts system with the ineffectiveness of the Airline Consumer Advocate, it is clear we need consumer protection reform and a truly independent, external dispute resolution ombudsman scheme.”
The ACCC recently lodged legal action against Qantas over so-called “ghost flights”.Credit: Michel O’Sullivan
The ACCC has also called for more transparency around why a flight is cancelled and has accused the major airlines of often hiding behind unnecessary cancellations to engage in anticompetitive practices such as slot hoarding.
“Consumers are well-protected when the markets are competitive, and that goes to both service, reliability and price. The ACCC would like to create conditions for more competition in the domestic airline industry to benefit consumers,” Brakey said.
Meanwhile, CHOICE policy adviser Bea Sherwood said it was important the ombudsman scheme covered the broader aviation and tourism sector to properly address systemic issues across the ecosystem.
“Ombudsman schemes have the power to assess what’s fair and reasonable, they can identify systemic problems to work in favour of airlines and consumers,” Sherwood said.
Virgin Australia has narrowed its average call centre wait to just one minute.Credit: Getty
How does the rest of the world compare?
Politicians including independent MP Monique Ryan have pointed out recently that passengers in Canada, the United Kingdom and the European Union are entitled to monetary compensation in the event a flight delay or cancellation was not caused by an “extraordinary circumstance”.
In the case of the EU, passengers are entitled to set amounts of between €250 ($417) and €600 ($1002) if their flight is delayed by more than three hours, provided the cause is directly attributable to the airline and not other factors such as weather. Airlines are also bound to refund passengers within seven days in the event of a longer delay.
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However, the boss of the International Air Transport Association (IATA) Willie Walsh said in June that EU consumers had paid more for airfares since the compensation scheme was introduced. The European Commission’s 2018 report on air passenger rights also shows that delays and cancellations have persisted despite the scheme.
Walsh pointed out in June that while financial compensation seemed a worthy model, it forced airlines to pass the cost onto the public and led to diminished customer service.
“With more governments introducing or strengthening passenger rights regulations, the situation is no longer sustainable for airlines. And it has little benefit for passengers because it does not encourage all parts of the aviation system to maximise customer service. On top of this, as costs need to be recouped from passengers, they end up funding this system.”
Data from the International Air Transport Association – which represents 300 of the world’s airlines – shows the on-time performance and number of delays in Europe are in line with Australia. But CHOICE’s Sherwood said the EU scheme was appealing because of its transparency and the agency it gave customers.
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“You have guarantees for when things go wrong that don’t change depending on the airline you fly. On the odd occasion your flight is cancelled … you’re fairly compensated,” Sherwood said.
Competition is also a telling factor for passengers in Australia. While travellers in Europe and the UK can choose between many airlines and have the option of other transport such as high-speed rail, in Australia two airlines control 95 per cent of the domestic market and face next to no competition from other modes of transport.
Local airlines have privately urged governments to exercise caution when considering such measures and have warned mandatory compensation could further inflate airfares or exacerbate the existing problems if not carefully tailored to the domestic market.
Is anything likely to change?
The government is considering stronger consumer protections, which could include an independent ombudsman scheme as part of its long-awaited aviation white paper due to be released in mid-2024.
Transport Minister Catherine King says the government is considering a consumer rights charter.Credit: Akex Ellinghausen
Transport Minister Catherine King said the aviation industry could better protect consumer rights. “Services need to be reliable, competitive and affordable, backed by a robust consumer rights framework,” she said.
“I don’t think that the aviation industry is always delivering the outcomes that Australians expect … We are seeking stakeholder views on options to improve the effectiveness of the Airline Consumer Advocate.
“We are also considering whether options pursued in other jurisdictions – such as a customer rights charter or a stronger ombudsman model – would deliver benefits to Australia’s aviation sector,” said King.
While the white paper is in motion and the aviation sector faces increasing pressure to maintain competition, it’s not yet clear whether the industry’s roaring return to profit will be sustainable in years to come – meaning a swathe of new challenges for air travel and consumers.
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