AUSTRALIA’S major airlines have committed to talks with the national consumer watchdog after being hit with a warning over refund policies and the fees they charge to change bookings.
After an investigation into more than 1,400 passenger complaints, the Australian Competition and Consumer Commission (ACCC) issued an Airlines Terms and Conditions report in the days before Christmas, putting the carriers on notice that it might take further action if they fail to make improvements.
The airlines are now in discussions with the corporate regulator in an effort to appease its concerns, which centre on “no refund” statements and what it says are “excessive” fees imposed for flight cancellations and revisions.
“We are concerned that some airlines’ policies appear inconsistent with consumers’ rights under the law,” said ACCC chairman Rod Sims.
“A major issue for consumers is excessive fees for flight cancellations. While airlines are free to differentiate their fares based on flexibility, they should not impose fees that are disproportionate to the original fare,” Sims said.
Among examples of concern cited by the ACCC is the case of a consumer who bought return flights between Sydney and Los Angeles for four people at a cost of $3,500. When the consumer cancelled the flights more than one month prior to departure, the airline charged $2,000 in fees, or more than 57% of the original fare.
In another case, a passenger making a same-day trip between Sydney and Canberra had their flight cancelled because of a mechanical fault. The delay extended beyond the time of their return flight, yet the carrier refused a refund and would only offer a credit.
“Airlines must deliver on remedies their customers are entitled to without delay or excuse,” Sims said.
While passengers are protected by the terms of Australian Consumer Law and are entitled to refunds in certain circumstances, the ACCC is concerned airlines may be misleading in making “no refund” statements online, particular in relation to low cost fares.
“It is completely inadequate to have ‘no refund’ statements qualified in obscure fine print,” Sims said. “These blanket statements can wrongly lead consumers to think they can never get a refund, in circumstances where they can.”
“The ACCC will engage with the airlines about the concerns raised in our report to discuss our expectations for change,” he said. “Where consumer issues continue, the ACCC will likely look to take action.”
Consumer advocate Choice welcomed the report and said airlines were under greater scrutiny than ever before.
“We are pleased to hear the ACCC has put Australia’s airlines on notice — ‘no refund’ statements and excessive cancellation and change fees will not be tolerated,” said Choice head of campaigns Sarah Agar.
“The regulator’s bid to potentially step in and take action on individual cases is great news for any frustrated traveller who’s been treated poorly by their airline,” she said.
Qantas defended its stance on refunds, saying “aviation is unique in many aspects from other industries, and our fares and conditions reflect that we cannot resell a seat after a flight has departed”.
“We will discuss this in detail with the ACCC,” a Qantas spokesperson said.
Virgin Australia also said it would respond to the ACCC’s concerns.
“Virgin is committed to doing the right thing by our customers and we review our conditions of carriage on a regular basis,” the carrier said in a statement.
“We look forward to engaging constructively with (the ACCC) as this is in the best interests of our customers.”
