Executives of Australia’s two largest airlines, Virgin and Qantas, have been probed on why Australian flight passengers do not enjoy the same consumer protections as those in the U.S. and EU.
In August 2024, the Labor government released the Aviation White Paper, which outlined its vision for the sector toward 2050.
The Charter lays out the basic framework for “prompt and fair remedies and support” for consumers subject to delays and cancellations.
This includes receiving regular updates on the status of their flights, having the option to cancel the flight with a full refund, receiving assistance to rebook alternative flights without fees, as well as meal reimbursement and accommodation where flights are delayed.
How Compensation Schemes Work?
In 2004, the EU parliament passed the Air Passengers Rights Regulation 2004 that sets up standards for helping passengers dealing with flight delays or cancellations.
While U.S. consumers are not automatically compensated in the event of delays or cancellations, regulations introduced by the Biden administration in 2024 required airlines to give automatic refunds to passengers.
A recent survey commissioned by travel insurance provider Insure&Go indicated that cancellations and delays were of most concern for Aussie passengers.
Around 76 percent of respondents identified cancellations and delays as the most likely risk for domestic travel in 2025, followed by extreme weather (flooding, bushfire, and so on) at 59 percent, and losing luggage at 42 percent.
Compensation Schemes Do Not Deal With the Root Cause of Delay: Airlines
During a recent parliamentary inquiry hearing, Nationals Senator Bridget McKenzie asked Virgin Australia and Qantas—whose combined domestic market share amounts to 70 percent—why consumers in Australia had weaker protections than those in the United States and EU.Stephen Beckett, general manager at Virgin Australia, did not directly answer the question, but said it was important that consumers were protected.
“That is why we do strongly support better access to Australian Consumer Law, where customers can seek remedies for when their flight does not go to the on-time performance and Virgin Australia has agreed and supported a strengthening of the complaints handling body and for that body to be able to make final determinations that the airlines must live by,” he told the Rural and Regional Affairs and Transport Legislation Committee.
Beckett also stated that the compensation scheme in the EU did not appear to fix the cancellation problem there.
“The types of performance that you’re looking to improve are not connected to what is paid and what’s not paid. It is [connected to] the root causes of delays and cancellations, such as weather, air traffic, control, engineering, [and] people being sick in Europe,” he said.
Echoing the sentiment, Qantas Domestic CEO Markus Svensson said that, based on his experience in the EU, a compensation scheme did not improve customer protection.
“I now also know from all the studies that it [compensation scheme] increases the cost. It hasn’t improved in terms of cancellations and delays,” he said.
McKenzie was not satisfied with the executives’ answer and pointed out that the purpose of a compensation scheme was not to improve airlines’ behaviour but to compensate Australians.
“The evidence just now was that European travellers have been compensated to the tune of $9 billion thanks to those airlines—something that’s not available currently and under the government’s laws to the Australian travellers,” she said.
Existing Law Framework Undermines Consumers’ Rights: Lawyer Alliance
Meanwhile, Victoria Roy, the chair of the Australian Lawyers Alliance’s Travel Law Special Interest Group, raised concerns that current laws were undermining air passengers’ rights.“Firstly, there’s no specific framework in Australia that covers passenger rights. So some travellers who fly internationally are covered by foreign schemes, whilst others aren’t,” she said.
“It’s been specified that the Charter is not adding any additional rights. It’s just to run alongside the Australian Consumer Law. And the Australian Consumer Law is vague and complex to navigate.
“So, the difficulty is that many Australians don’t have rights. If they do have rights, they don’t know what those rights are.”
Roy also noted that there was no simple, affordable way for Australian passengers to enforce the few rights they had.
As such, she suggested the parliament come up with a new, simpler law to address this loophole.
