The US Department of Transportation (DOT) recently introduced a new rule to ensure American carriers give cash refunds to passengers when flights are cancelled, significantly delayed or baggage is majorly mishandled. The decision was seen as a watershed moment for consumer rights in the US.
It also raises the question of whether Australia should adopt a similar policy.
Qantas recently agreed to compensate 86,000 customers for cancelled flights after the ACCC took it to Federal Court for misleading travellers.
Following the ruling, consumer watchdog CHOICE said the settlement sent “a very clear message to all airlines and travel service providers that misleading consumers about cancellations does not fly”.
“Qantas agreeing to pay $120 million dollars and admitting it misled consumers after ACCC court action is a significant result,” CHOICE Director of Campaigns and Communications Rosie Thomas said.
“CHOICE is pleased to see compensation included in the settlement. Over 80,000 consumers have had their travel plans derailed by Qantas’ behaviour over a number of years and these payments are already well overdue.”
While the Qantas case specifically related to flights the airline had sold tickets for but were already cancelled, CHOICE believes compensation should be extended to any significantly delayed or cancelled flight.
“We’ve heard from countless consumers about having to fight tooth and nail to receive refunds or compensation from airlines for delayed or cancelled flights,” Thomas said.
“Consumers should not need regulator action to receive compensation when it’s owed.”
In a 2023 CHOICE poll of nearly 9,000 consumers, an alarming two in five (40 per cent) respondents said they experienced cancelled or delayed flights in 2023. And among those who had sought a refund or compensation for a cancelled flight, one in five had to wait over six months.
“CHOICE is calling for the establishment of a new travel and airline ombuds scheme and stronger rights to refunds and compensation for cancelled flights,” Thomas stated.
“We look forward to the Federal Government’s upcoming Aviation White Paper to set out a clear plan to bring Australia’s airline consumer protection framework in line with comparable international jurisdictions.”
Late last year, in response to the Federal Government’s Aviation Green Paper – part of a process created to help develop a 30-year strategy for Australia’s aviation industry – Qantas warned that compensation would ultimately result in an increase in cost for flyers.
“The proposal to introduce a mandatory compensation scheme doesn’t address the core drivers of delays and cancellations (which already represent a significant cost to airlines) and is likely to lead to higher fares and make marginal routes less sustainable,” the carrier said in a statement.
“A similar scheme in place in Europe hasn’t led to a reduction in disruptions, with recent on-time-performance below Australia’s.”
