Refund Denials !

The Australian airline industry has been lying to its customers when it claimed that this country's consumer protection laws do not apply to discounted air fares.  In many cases refunds have been refused even though the flight has either been cancelled by the airline or has been subjected to such a delay that the traveller has missed the overseas connections that were the reason for the booking.

The Australian Competition and Consumer Commission ( ACCC) has intervened and handed out fines of over two million dollars as the penalty for misleading customers about their legal rights.   It has been made clear to the airlines that no matter how cheap the fare price offered the consumer protection laws of this country still apply.

In many cases the airlines have claimed that consumer rights only apply to higher priced services and one of the restrictions applied to heavily discounted prices was the unavailability of refunds in most circumstances.   Under the law, consumers may be entitled to a refund if a flight is significantly delayed or cancelled and the airline can not put the passenger on an alternative flight in a reasonable time.

That word - " Reasonable " - is not spelt out in black and white.  The law does not entitle customers to a refund if they change their plans or miss their flights.   Should a road accident create a traffic jam that prevents the customer reaching the airport in time that would not constitute a valid refund reason and each case would need to be treated on its individual merits.

Airline travellers have often complained that when a refund has been granted it is not serviced by the actual return of the money paid but by the issue of a travel voucher with a twelve month use-by date. The ACCC law is quite clear that " refund " means return of the money involved.

Each Australian airline has its own policy on how it will compensate passengers for delayed or cancelled flights but the laws of the ACCC apply.  Variations are common in other countries and in some cases fixed compensation rates apply.  In the European Union passengers who land more than three hours late can claim a refund of about $600 Australian dollars.   New Zealand also has a fixed compensation agreement in place.

The important thing is that the ACCC has stepped in and made it quite clear that the evasion claimed by the airlines is not legal.  The fines imposed have forced the airline industry to lift its game  and passengers who think they were entitled to a refund are urged to raise the matter again with the airline concerned.

There is the expectation of a vast improvement in airline behaviour because the fines that apply are draconian.  They range from $ 1.1 million for each individual breach to more than ten million or ten percent of the airline turnover for very serious cases.

This enforcement of consumer rights will be seen as an added cost of doing business by the airline industry.  Perhaps heavily discounted fares may not be so readily available but reliability of connection is important to passengers and that also should show improvement.