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ACCC warns airlines: Don’t break the law!

December 22, 2017 Headline News No Comments Email Email

With the holiday travel season upon us, consumer complaints about excessive – and sometimes outrageous – fees for cancelling or changing flights have led the Australian Competition and Consumer Commission (ACCC) to warn airlines to comply with consumer law.

Some examples are shocking. One consumer purchased return flights between Sydney and Los Angeles for four people for AUD 3500. When the consumer cancelled the flights more than one month before the travel date, the airline charged AUD 2000 in fees, representing over 57% of the original fare value.

With over 10 million passengers flying last December and January, the ACCC has released a report Airlines: Terms and conditions to remind travellers of their rights ahead of the busy Christmas travel season.

The ACCC received 1400 complaints about airlines from 1 January 2016 to 14 December 2017, largely concerning consumer rights, known as consumer guarantees. It analysed many of these complaints as part of its 2017 enforcement priorities.

“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,” ACCC chairman Rod Sims said.

“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.

“A major issue for consumers is excessive fees for flight cancellations. While airlines are free to differentiate their fares based on flexibility, they should not impose fees that are disproportionate to the original fare,” Sims said.

In addition, the ACCC says airfare terms that mean consumers – but not the airlines – are penalised for breaching or terminating contracts may amount to unfair contract terms.

“Some contracts entitle airlines to make unlimited changes without consequence but customers are penalised for even minor adjustments. Airlines should remember that consumers are protected from unfair contract terms where they have little or no opportunity to negotiate with businesses,” Sims said.

That was where the ACCC cited the cost of the Sydney/Los Angeles flight cancellation, mentioned above.

“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.”

In one example, a consumer booked a same day return flight from Sydney to Canberra. The flight was cancelled due to a mechanical fault. The delay extended beyond the departure time of the consumer’s return flight. The consumer sought a refund but was only given a flight credit. Under the ACL, this consumer should be entitled to a refund, but was advised by the airline that refunds were not available.

“Airlines must deliver on remedies their customers are entitled to without delay or excuse. 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 said.

Consumers should retain any travel documents and records of communications with airlines, and contact fair trading agencies or the ACCC with concerns.

Over 59 million passengers travelled on Australian domestic airlines in the 2016-2017 financial year. Some 5.14 million passengers were carried on domestic flights in December 2016, an increase of 1.7 per cent on December 2015. Some 4.96 million passengers were carried on domestic flights in January 2017.

Edited by Peter Needham

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