Transport regulators around the world are putting pressure on airlines to improve their standards after a series of schedule breakdowns and questionable business practices sparked calls for reform. In Australia, Qantas Airways Ltd. was sued for allegedly selling seats on thousands of canceled flights.
Malaysia’s new rules, which come into effect on Monday, also apply to passengers who choose not to board the delayed flight and wish to book another flight instead.
Refunds must be made via the original means of payment, the Malaysian Ministry of Transport said.
Earlier this year, the U.S. Department of Transportation ordered airlines to automatically issue refunds for canceled or severely delayed flights. Protections for travelers in the U.S. were tightened after a growing number of complaints about airlines refusing or delaying refunds.
In Australia, discussions are now underway on comprehensive reforms to strengthen competition and consumer rights in air transport. This includes making it easier for passengers to obtain refunds.
Qantas CEO Vanessa Hudson said in a call with investors following the release of its full-year financial results on Thursday that requiring airlines to refund fares in the event of cancellations and delays would only drive up ticket prices as airlines would try to recoup the extra costs elsewhere.
Malaysia said airlines that violate the new rules could be fined up to 200,000 ringgit ($46,000), with further violations likely to result in even higher fines.
