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Australian Competition and Consumer Commission calls out domestic carriers for excessive fees

The Australian Competition and Consumer Commission (ACCC) is considering taking action against local airlines over prickly issues such as exorbitant fees for changing or cancelling flights, and refusing to issue refunds.

The ACCC will also be monitoring the reasons for airlines’ decision to cancel flights especially when speculations are ripe that the real reason is often low passenger loads.

ACCC Chairman Rod Sims named Qantas and Virgin Australia and told them to expect a pushback if “consumer issues continue”, citing 1400 passenger complaints often about consumer rights, known as ‘consumer guarantees’ in 2017.

“Some very consistent themes and bugbears for airline passengers emerged, including no refund statements, excessive fees for cancelling or changing flights, and issues relating to consumer guarantees,” Sims stated.

“Like any business selling to local customers, airlines must comply with consumer law. We are concerned that some airlines’ policies appear inconsistent with consumers’ rights under the law.

“The ACCC will engage with the airlines about the concerns raised in our report to discuss our expectations for change. Where consumer issues continue, the ACCC will likely look to take action,” Sims added.

The ACCC claimed the case of a traveller who bought return flights between Sydney and Los Angeles for four people, which cost him $3,500.

When the consumer cancelled the flights more than one month before the travel date, the airline charged $2,000 in fees – a fee that represented nearly 60% of the original fare value.

Sims said that while airlines are free to discern their fares based on flexibility, they should not slap on cancellation fees “that are disproportionate to the original fare.”

“It is completely inadequate to have ‘no refund’ statements qualified in obscure fine print,” Sims said.

“These blanket statements can wrongly lead consumers to think they can never get a refund, in circumstances where they can,” Sims added.

Another complaint saw a traveller on a same-day return flight from Sydney to Canberra. The flight was cancelled because of a mechanical fault, with the delay going beyond the departure time of the return flight.

The passenger asked for a refund but was rebuffed by the airline and given a flight credit despite the fact that, under Australian consumer law, they were eligible to receive a full refund on the fare.

“Airlines should remember that consumers are protected from unfair contract terms where they have little or no opportunity to negotiate with businesses,” Sims said.

He went on to say that airlines “must deliver on remedies their customers are entitled to without delay or excuse.”

The ACCC proposes that travellers should keep any travel documents and communications with airlines and get in touch with fair trading agencies or the ACCC for any concerns.

A Qantas spokesman responded to the ACCC’s report, saying “the conditions that apply to every fare we sell are clearly shown when booking and our full terms and conditions can be read at any time.”

“These conditions are ultimately about serving our customers efficiently and giving them options about how much flexibility they need.”

“Aviation is unique in many aspects from other industries, and our fares and conditions reflect that we cannot resell a seat after a flight has departed. We will discuss this in detail with the ACCC.”

Virgin Australia on the other hand, said it is “interested in exploring opportunities with the ACCC that may improve the application of the consumer guarantees within the airline industry. In 2018, we look forward to engaging constructively with them as this is in the best interests of our customers and the broader airline community.”

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