Australia's domestic airlines ripping consumers off, Choice says
Updated
Consumer group Choice has listed six ways it believes Australia's domestic airlines have been ripping off their passengers and has called on the consumer watchdog to intervene.
Choice said it had identified "systemic breaches" of the Australian consumer law and called on the Australian Competition and Consumer Commission (ACCC) to launch action.
Choice campaigns director Matt Levey said the airlines have been "flying below the radar" when it comes to consumer protection.
"Our investigation reveals the significant power imbalances between consumers and airlines, which are not being held to the same basic standards as other industries," he said.
So, what sort of things are airlines doing that has Choice so upset?
1. No refund policy
Three out of four major domestic airlines have a blanket no refund policy, contradicting consumer law that gives everyone the right to a refund, the group said.
It is a practice Choice director of campaigns and communications Matt Levey said had gone unchecked for too long.
"We often see other businesses in other industries held to task for exactly these sorts of practices; it's time that airlines cleaned up their act," he said.
Businesses across the country are banned from making "no refund" claims, but the airlines do so blatantly when selling tickets.
"Under the Australian 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," Mr Levey said.
2. Exorbitant cancellation fees
Airlines are charging cancellation fees of up to 100 per cent of the ticket, or up to $550 per ticket.
However, Matt Levey said changing airline fees, such as excessive credit card surcharges, was more difficult than in other industries.
"Even in recent days we've seen Jetstar reluctantly remove the pre-ticked boxes from its booking process," he said.
"They [the airlines] are not responsive to consumer needs in the way that other industries are."
"The ACCC's guidance to travel providers said cancellation fees should be reasonable and reflect the actual costs to the business, which is generally 10 per cent of the total cost.
"When a consumer cannot travel, or chooses not to travel, they can lose up to 100 per cent of the fare, even though there is ample time to re-sell the seat," Mr Levey said.
"Particularly unfair are 'no show' clauses that allow airlines to unilaterally cancel your tickets on multiple flights if you are unfortunate enough to miss a leg of your journey.
"These clauses have been banned in other countries such as Germany and Spain and it's high time our domestic airlines put an end to this practice."
3. No accountability
Choice said consumers are not offered adequate remedies when their flights are delayed or cancelled, with some consumers being offered no remedy at all.
Its investigation found Australian travellers are not being offered "fixed compensation" if their flight was cancelled or delayed within the airlines' control.
"Our research shows very few consumers receive compensation when their flights are cancelled, delayed or changed, and when they do, it's often inconsistent," Mr Levey said.
"In some cases this leaves travellers paying hefty cancellation fees for flights, which through no fault of their own, are no longer fit for purpose."
4. Zero responsibility
Airlines are dodging responsibility to deliver flights on time despite charging premium prices for peak flight times.
Choice said travellers are being denied fair treatment when something goes wrong.
In overseas jurisdictions, particularly throughout Europe, if your plane is delayed for more than two hours, you have a whole range of set rights to compensation.
"That includes both monetary compensation through to providing a hotel room and food vouchers," Mr Levey said.
"But there's nothing like that in Australia — you are very much at the mercy of individual airlines and it depends on what sort of customer you are and which airport you are at as to what happens to you and we think that's not good enough."
5. No access to credit
Passengers who are given credit on future flights are not being given access to the credit, Choice says.
It said consumers who are offered credit are often given no information on how to access that credit.
"Some airlines don't appear to give cash refunds at all, they just provide travellers with credit into what they call their travel bank and if doesn't happen to suit you to use that credit in that period before it expires, then you lose your money," Mr Levey said.
6. Ticket voids
People who miss a leg of a flight are having multiple tickets voided.
Mr Levey said these cancellations had been banned in other countries, such as Germany and Spain.
He said airlines could act immediately without any action by the ACCC.
"So it's not all about the regulator getting involved. If the airlines wanted to actually start treating their customers better they could get rid of the blanket no refund sign," he said.
"They could make their terms and conditions way clearer and simpler to read, they could clearly communicate their cancellation fees and actually reduce them to reasonable levels that reflected the cost of reselling that flight."
Choice said one area where other countries are well ahead of Australia is with "no show" clauses.
"It's a bit of an arcane clause but it does catch people out in a nasty way ," Mr Levey explained.
"If you've got an around-the-world ticket or a flight that might have two or three legs, if you fail to show up for one of those legs the airline will cancel the airline ticket unilaterally."
"We've heard from people on holiday in Europe, they might have decided to get a train back to London instead of one of the flights and when they arrived at Heathrow, the rest of the journey had been cancelled and that's an entirely unfair way to deal with a contract."
Airlines defend their services
Jetstar, Qantas, Tiger and Virgin airlines have all rejected the claims made by Choice, saying they comply with Australia's consumer law.
In a statement, Tigerair said the company had a unique cool-off period where passengers were able to amend their bookings.
"While Tigerair fares are generally non-refundable where the guest changes their mind … customers have a cooling-off period of 24 hours after booking a flight."
A Qantas spokesperson said Choice's report was: "selective about facts and mischaracterises the law around refunds".
The spokesperson said they offer refunds circumstantially but if people were able to move between flights it would interrupt the efficiency of the airline.
Similarly a Jetstar spokesperson said the report shows a "complete misunderstanding of Australia's consumer laws and how airlines work".
They said refunds are not offered because reselling the ticket is sometimes impossible.
"While a supermarket or retailer can refund an item and then easily sell it again, airlines can never resell a seat after a flight has departed with empty seats and Jetstar's fares and conditions reflect this."
In a statement, Virgin said it was up to the customer to read the terms and conditions before purchasing a ticket to ensure they understood the services offered.
Topics: consumer-protection, air-transport, australia
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