Airlines Could Be Forced to Refund Travellers for Delayed Flights: White Paper

The Aviation Customer Rights Charter will also set out when airlines must refund passengers in the form originally paid and in a prompt timeframe.

A line of Qantas aircraft sits at Kingsford Smith Airport in Sydney, Australia, on Oct. 31, 2021. James D. Morgan/Getty Images

Australian travellers will find it easier to get cash compensation in time when their flights are cancelled or delayed.

On Aug. 26, the Albanese government released its Aviation White Paper, which examined policies to “promote efficiency, safety, sustainability, and competitiveness of the aviation sector out to 2050.”

Transport Minister Catherine King said it was time to protect consumer rights as the Australian traveller number recovers to its pre-COVID-19 level.

“Too many Australians have been left out to dry when flights are cancelled or disrupted and it’s impossibly complex to get a refund or even contact a company representative,” she said. “Customers deserve their money back if they are owed it.”

According to a report by the Bureau of Infrastructure and Transport Research Economics, in 2023, about one-third of flights failed to leave on time, while 3.7 percent, or about 16,000, were cancelled.

New Industry Watchdog

The Commonwealth government has also promised to set up a watchdog named the “Aviation Industry Ombuds Scheme,” which will replace the current airline customer advocate.

Funded and run by airlines, the latter was criticised for its lack of power to oversee order refunds and compensation.

The new ombuds scheme, in comparison, can direct airlines and airports to compensate customers, report on the industry’s conduct, and recommend changes to the government.

The scheme will enforce an Aviation Customer Rights Charter, which will stipulate the length of “an unreasonable delay” and what is considered appropriate treatment of customers in cases like flight disruptions.

The charter will also set out when airlines must refund passengers in the form paid initially and in a prompt timeframe, signalling the end of offering vouchers and flight credits.

Legislation for the scheme is expected to go before Parliament in 2025, and the independent ombudsman will be in place by 2026. An interim ombudsperson will be appointed before the legislation is introduced next year.

Treatment of People With Disability

Passengers with a disability will also gain better treatment with the white paper addressing barriers to access.

Rules requiring passengers to travel with a carer, transfer into certain wheelchairs, or limit the number of passengers with wheelchairs on a flight will be banned.

Airlines need to offer passengers with disability a choice of creating an “assistance profile,” which stores their data with assistance animals and wheelchair information for future bookings.

Social Services Minister Amanda Rishworth said the changes will help make Australia more inclusive.

“People with disability continue to encounter inaccessible facilities and services at airports and face unhelpful practices and systems adopted by airlines,” she said.

“People have been left stranded on planes, forced to return to their departure port or had to put up with poor treatment due to a lack of access to appropriate facilities at their destination.

“They have a right to fair treatment and compensation when their essential equipment is damaged or destroyed.”

Boost Air Connectivity in Regional Australia

The government has also promised to strengthen air services in regional and remote Australia, where airfares are higher compared to intercity flights and to airfares in other countries.

“The recent exit of Bonza, and difficulties at Rex, demonstrate the challenging conditions faced by providers of regional air services,” reads the Aviation White Paper.

“Consistent with its commitment to Closing the Gap, the Australian government will extend the Remote Airstrip Upgrade (RAU) Program by providing an additional $50 million over three years to improve the safety and accessibility of remote airstrips across Australia.”

The government also committed to provide $40 million over three years to extend the Regional Airports Program, which will “be expanded to also provide grant funding to regional aerodromes for investment in the infrastructure required to adapt for the future.”

Slot Manager For Sydney Airport

In addition, the government has agreed to arrange the slot manager to “increase transparency, rebalance slot allocation towards new entrants, and strengthen compliance arrangements and enforcement action against slot misuse.”

Submissions to the Aviation White Paper said that the current Sydney Airport Demand Management (SADM) scheme creates incentives for airlines to reserve more slots at Sydney Airport than they intend to use, which limits competition, imposes barriers to new entrants, and results in higher rates of flight cancellation.

The perceived scarcity of slots, especially during peak periods, has also been identified as a barrier to airlines seeking to enter the Australian market or to compete on the busiest routes.

Cancellation rates on the Canberra-Sydney route have been disproportionately high compared with other routes, according to a submission from Canberra Airport. It said that the reason lies in airlines scheduling more flights to Sydney than planning to operate, so as to reserve slots which may be taken up by other airlines.

The minister for transport announced the government will conduct a competitive selection process for the appointment of the slot manager and will have regard to actual and perceived conflicts when selecting the slot manager.

AAP contributed to this report.