An ombudsman will oversee airlines’ treatment of their customers and enforce a charter of passenger rights to ensure timely refunds and potentially financial compensation for delayed and cancelled flights as part of Australia’s groundbreaking aviation reforms.
The government of Albania will publish its much-anticipated white paper on aviation on Monday, which will also improve protection for passengers with disabilities who have been poorly treated by airlines in the past. Airlines will have to adhere to new standards and offer a wider range of wheelchairs.
However, it is unclear how the federal government will address concerns about competition, which has been the most pressing issue for the industry in recent months following the collapse of Bonza and the financial turmoil at Rex, which led to the regional airline’s bankruptcy and the suspension of jet services between capital cities.
Industry experts and the competition authority have warned that the duopoly of the Qantas Group, which includes budget airline Jetstar, and Virgin Australia could now raise airfares without feeling pressure to improve the customer experience. Qantas and Virgin control more than 90 percent of the Australian market.
Ombudsman regulation
Following calls from consumer advocates, the government will set up an ombudsman for the airline industry to replace the airlines’ existing customer advocate. The existing body is funded and run by the airlines and critics have called it toothless, unable to order refunds or compensation.
The new Ombudsman program is an external dispute resolution service where passengers can file complaints about wrongdoing by airlines and airports. The service also has the power to order companies to pay compensation to their customers if they have failed to meet their obligations.
The Ombudsman Program will publish reports on the conduct of airlines and airports, make recommendations to the government and refer cases of misconduct to the Australian Competition and Consumer Commission for investigation, enforcement and possible legal action.
The program will be supported by a legal framework and will be similar to programs in other industries, such as telecommunications.
“Airlines will also be required to ‘give reasons’ – that is, they will have to provide the reasons for delays and cancellations as part of their regular reporting to the government, and the Ombudsman can request additional information on specific flights. This will increase transparency and public accountability and enable the government to determine whether further regulation is needed,” the government said.
An interim ombudsman will be appointed shortly, and a consultation paper asking the public for feedback on details will be published on Monday. The relevant legislation will be introduced next year, and the formal system is expected to be in place by 2026.
Charter of Consumer Rights
Passengers in Australia are entitled to a list of legal rights that airlines are required to uphold or face penalties.
The Charter of Customer Rights – part of the Ombudsman legislation – sets out the “reasonable and fair” behaviour of airlines and airports, including how they treat passengers in the event of delays and cancellations and how they communicate disruptions.
The charter will specify when airlines must refund passengers their money, which must be the amount originally paid and within a short period of time – which would mean the end for airlines offering flight vouchers and coupons.
It will also set out what constitutes a reasonable delay and whether the delay or cancellation was within the airline’s control – a measure designed to test Qantas and Virgin’s claims that their high cancellation rate on routes out of Sydney Airport is not the result of a deliberate strategy to schedule more flights than they intend to operate before cancelling them in order to deny rival airlines access to scarce slots.
The exact details of the charter will be finalised following a consultation, but the Government has indicated it could cover meals, accommodation, refunds and “financial compensation” in the event of a flight delay or cancellation.
Compensation schemes exist in the United States and the European Union. In Europe, passengers whose flights arrive at their final destination more than three hours late are entitled to compensation ranging from €250 ($485 Australian dollars) to €600 ($1,165 Australian dollars), depending on the distance of the journey.
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In case of longer delays, passengers can request a full refund within seven days. If a passenger misses a connecting flight with the same reservation due to a delay, the airline must also pay compensation.
In Australia, compensation is currently at the discretion of the airlines, but the federal coalition supports a financial compensation scheme for air passengers.
Labor Transport Minister Catherine King said: “Too many Australians are left out in the cold when flights are cancelled or disrupted and it is incredibly complicated to get a refund or even contact a company representative.”
“Customers have a right to get their money back if they are entitled to it. Period,” she said.
Treatment of passengers with disabilities
The government will promise to tighten regulations that force airlines to improve their treatment of passengers with disabilities.
Disability advocates have long complained that airlines violate anti-discrimination law by forcing passengers to transfer to certain wheelchairs, travel with a companion or limit the number of wheelchair users on board an aircraft. Such regulations would be banned.
The government will create new aviation-specific standards for people with disabilities, setting out the rights of people with disabilities when travelling by air.
Guardian Australia had previously reported that poor coordination between airports, airlines and third-party ground handling teams had resulted in passengers with disabilities being stranded.
Airlines will be required to offer passengers with disabilities the opportunity to create an “assistance profile” so that they can save their personal data including information about assistance animals and wheelchair specifications for future bookings.
The Royal Commission into Disability heard that people with disabilities regularly face violence, abuse, neglect and exploitation on domestic flights. Participants in the inquiry said they felt airlines “dehumanise” them and complaints are rarely followed up.
King said: “People were left stranded on planes, forced to return to their departure airport or endured poor treatment because they did not have access to appropriate facilities at their destination.”
