Consumer advocacy group Choice has filed a complaint with the Australian Competition and Consumer Commission (ACCC) over the actions of the domestic airline sector.
Choice says the airlines are even acting illegally in some instances – particularly when it comes to refunds. "Excessive fees, unfair terms and poor complaints handling are part of an entrenched culture in the airline industry," says Choice.
Choice says the airlines push the boundaries with, and appear to breach, the consumer law with no regard and little consequence.
Australian businesses are strictly prohibited from making blanket 'no refund' claims, but three of Australia's four major airlines clearly state that flights are non-refundable. All four airlines, Qantas Airways Limited (ASX: QAN) and its subsidiary Jetstar, Virgin Australia Holdings Ltd (ASX: VAH) and its subsidiary Tigerair, make claims that sale fares, low-cost fares and non-flexi fares are strictly non-refundable.
Choice also says that consumers are frustrated and left out of pocket when their airline refuses to take financial responsibility for incomplete or unsatisfactory service. That is exacerbated for domestic travel, where most travellers don't have travel insurance.
Choice also says that consumers have little or no recourse with the Airline Customer Advocate having no enforcement powers – it is not a true external dispute resolution scheme. The advocate group wants the ACCC to enforce Australian Consumer Law (ACL), as well as a thorough review of the terms and conditions of the Australian airline industry.
Choice has a list of six recommendations:
- At a minimum, airlines should remove blanket 'no refund' claims from their online booking processes, and include clear information about consumer rights under ACL.
- Terms and conditions need to be clearer and ensure they can be easily understood in the time given for making an online booking.
- Cancellation fees must be clearly communicated at any point where a cancellation might be initiated.
- Cancellation fees should reflect the actual cost, taking into account lead time and likelihood of reselling the ticket. Either that or airlines should allow consumers to re-sell their tickets.
- Financial compensation should be offered when flights are delayed or cancelled for reasons within the airline's control. Compensation should be consistent and easy for consumers to arrange.
- Airlines should remove no-show clauses from their contracts.
Choice also says the ACCC should take action against airlines that refuse to remove 'no refund' statements in the booking process, Fare Rules and Conditions of Carriage. The ACCC is also advised to provide guidance on what acceptable fee levels, and make it clear to airlines that no-show clauses are unfair terms and take action against the airlines that continue to use them.
You can read Choice's full submission here.
