Will Australian Airlines Have to Pay Compensation for Flight Delays, Cancellations?

Will Australian Airlines Have to Pay Compensation for Delays, Cancellations?


Australian Airlines may have to pay compensation for flight delays and cancellations, if the government listens to the calls of consumer advocates. The Australian Competition and Consumer Commission (ACCC), consumer advocate Choice, and the Australian Lawyers Alliance (ALA) have all advocated for mandated compensation for cancelled and delayed flights, providing their input as the government puts together its aviation white paper due in 1H 2024.

Qantas, Australia's largest airline, only provides a meal voucher for delays of 2+ hours, and for overnight delays for passengers not at their home airport, limits reimbursement to AUD 200 (USD 133) for a hotel night and AUD 30 (USD 20) for meals per person, with no other compensation provided.

In the European Union, by contrast, EU law EC 261/2004 requires compensation payments of EUR 250-600 depending on the length of the flight and the flight delay (2+ hours for flights of 1500 km or less; 3+ hours for flights of 1501-3500 km, and 4+ hours for flights of 3500+ km.) when the delay or cancellation isn't caused by weather or “extraordinary circumstances.”

Even in the U.S., which has never had federally mandated compensation for flight delays and cancellations, the DoT is proposing compensation for U.S. flight delays and cancellations.

The ALA notes “Rather than Australian passengers having to jump through legal loopholes to receive flight delay compensation, in the rare instances where it is available, it is time for Australia to have its own simple and straightforward compensation regime.”

ACCC has pointed out that Australian airlines haven't been incentivized to avoid flight delays and cancellations. In July 2022, 6.4% of Australian domestic flights were cancelled and a record
46% of domestic flights were delayed. Prior to the pandemic, roughly 2% of flights were cancelled each month, although the Melbourne-Sydney route cancellation rate was often double this, ~4%. Although airlines did reduce the numbers of delayed and cancelled flights in the months subsequent to July 2022, January 2023 still saw 23% of flights delayed.

ACCC also notes that incumbent airlines such as Qantas tend to strategically distribute flight cancellations across certain flight times in order to meet “use it or lose it” obligations for flight slots, thereby preventing smaller airlines from acquiring those slots and being able to compete. Needless to say, this is a losing proposition for passengers, not only those whose flights are cancelled, but also for would-be passengers who don't get the benefit of a competing airline (often with lower fares), as well as the airport, which suffers lost productivity.

Choice Australia's money and travel manager, Jodi Bird, agrees with the ACCC that “[Australian] airlines would rather not have [mandated compensation for delayed and cancelled flights] because it would affect their commercial models and force them to concentrate more on flights leaving as close to on-time as possible.”

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Source: The Guardian

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