Australia’s major airlines should be investigated for systemic breaches of consumer law, the advocacy group Choice has found in a scathing assessment of the industry’s practices.
The report, titled Fare Play? Terms and conditions in Australia’s Airline Industry, criticises all four of Australia’s domestic airlines over refund policies, cancellation fees and delays.
The airlines have questioned the credibility of information relied upon by Choice, with all four major carriers stating they always adhere to consumer law.
Choice says there is a “significant power imbalance” between consumers and airlines and has asked the Australian Competition and Consumer Commission (ACCC) to adjudicate.
“When a service can’t be delivered with reasonable care, skill or in a reasonable time, consumers have rights to redress,” the report opened. “While the increase in competition in the industry has improved choice and lowered prices for consumers, remedies for consumers in the event of problems within an airline’s control – including delayed or cancelled flights – have not improved.”
Choice want the ACCC to use its wide-reaching powers to explore the actual costs of cancellations to airlines compared to what consumers pay. They also are calling on the regulator to analyse processes used by airlines to handle complaints and address failures – namely, keeping to schedule.
A significant portion of the report focused on the claim that three of four major Australian airlines declare “no refund” stipulations in their booking process without relaying to prospective customers their refunds rights under consumer law.
“You have a right to a refund no matter how many times an airline lands you with a no refund message as you make your way through an online checkout,” a spokesman for CHOICE, Matt Levey, said.
According to Choice, Qantas’ Red e-Deal, Virgin Australia’s Getaway Fare and Jetstar’s Starter fares are examples where blanket “no refund” claims are made.
Virgin argues this criticism is illustrative of broader shortcomings in the report, noting their the Gateway Fare is the only of the five they offer without refund provisions. Virgin says the category is specifically designed as a budget option for travellers certain of their travel plans.
On cancellation fees, the report cites ACCC guidance that they be about 10% of the original cost, highlighting examples from Qantas and Virgin – the only two who offer the option to rebook to begin with – where the impost for customers is triple that or worse.
Finding that delays are where customers are most aggrieved, the report recommends financial compensation where postponements or cancellations are found to be “within the airline’s control”.
Choice wants this process to be straightforward, concluding that consumers have “little or no recourse” when something goes wrong.
“Disturbingly,” the report says, “over 39% of consumers making a travel related complaint found it too much of a hassle and 11% didn’t even know how to make a complaint.”
Qantas, Virgin Australia, Tigerair and Jetstar officials all said in responses that they are compliant with Australian consumer law.
“Choice seems to forget that it has never been cheaper to fly in Australia,” Jetstar’s spokesman added, saying millions have travelled on the budget carrier for under $100 in the last 12 months. Tiger also pointed to their 24-hour cooling off period for customers to amend bookings free of charge at time of sale.
The chairman of the ACCC, Rod Simms, has pledged to review the report and its recommendations.
