Airlines reject claims of consumer law breach.

by Steve Creedy - editor
December 06, 2016
Qantas International A380
Qantas International has a new CEO

Qantas and Virgin Australia have rejected claims by Australian consumer advocacy group Choice that carriers are breaching consumer law with practices such as posting   “no refund “ signs on their websites.

Choice has lodged a “super complaint” with the Australian Competition and Consumer Commission, calling on the competition watchdog to give high priority to  airline consumer issues  and conduct market study to assess “systemic consumer protection issues’’.

It wants this to include the true cost of cancellations, reasons for delays and cancellations, airlines’ complaints handling processes and remedies available to consumers.

“Excessive fees, unfair terms and poor complaints handling are parts of an entrenched culture in the airline industry,’’ the complaint says. “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 has found that airlines push the boundaries with, and appear to breach, the consumer law with no regard and little consequence.’’

But Qantas accused Choice of being selective about facts and mischaracterising the law around refunds.

“ As customers would expect, our terms and conditions are fully compliant with Australian Consumer Law and they are clearly disclosed on our website,’’ a spokeswoman said.

“ We understand life can get in the way of the best laid travel plans, which is why we do offer refunds under certain circumstances.  By the same token, if we let people move between flights at will, it would be very difficult to run an efficient airline and that would have an impact on the cost of travel for everyone.’’

Virgin Australia  said it always complied with Australian consumer law and customers were required to confirm they were familiar with terms and conditions before buying a ticket.

"We offer a range of different fare types to suit the varying needs of our customers,'' a spokeswoman said. "Virgin Australia encourages its customers to familiarise themselves with the fare type they are purchasing, as inclusions and exclusions for each fare type are clearly outlined during the booking process.''

The consumer group argues the ACCC should take action against airlines that refuse to remove prominent, blanket “no refund’’ claims in the booking process, fare rules and conditions of carriage.

The competition watchdog should also require simpler terms and conditions and provide clearer guidance to the industry about acceptable fee levels. This should include situations when it is unacceptable for the airline to charge a cancellation fee, such as when a ticket is cancelled well before a flight and the airline has a chance to resell a seat.

Also in the consumer group’s sights are definitions of failures in the airline industry and when when a service is not" fit for purpose" as well as “no-show” clauses it sees as unfair..

Choice spokesman Tom Godfrey said he expected the ACCC to look at the details of the breaches in consumer law the advocacy group had outlined and it would be pushing for the issues to be  viewed as priority over the next 12 months.

“What I would say is ere are a number of things there that the airlines could fix immediately,’’ Godfrey told AirlineRatings. “The display of no-refund signs in the online checkout, they could get rid of that today if they wanted to.

“They could end excessive cancellation fees immediately and make them more reasonable. And the ACCC’s  already given guidance to the industry that they think about 10 per cent in most cases is fine.’’

Godfrey said Choice’s campaign for fixed compensation for delays and cancelations within the airline’s control, similar to systems in Europe, had been out there for six months.

“So all of these things could be acted on immediately but I have a feeling it will take regulatory intervention for them to be brought into line,’’ he said.