Grounded: Are Airlines Flying Above The Law?

Dec 12, 2016
Reading Time: 2 minutes
Written by Logan Tennyson

Ever had a bad experience with an airline, especially one that has been costly such as having to pay up to $500 to cancel a flight or unable to get a refund at all?

Australian airlines have recently been put under scrutiny by consumer group Choice after an investigation into practices that may be in breach by Australian Consumer Law. Qantas, Jetstar, Virgin and Tigerair are all subject to a complaint sent to the Australian Competition and Consumer Commission (ACCC) to look into the unfair practices undertaken by the airlines.

ABC News has detailed reasons as to why Choice has filed the complaint against the four Australian airlines, all potential breaches of Australian Consumer Law which aims to protect consumers and ensure fair trading. These include:

‘No Refund’ policies

It is a violation of consumers rights under the Australian Consumer Law to not offer a right to refund, and three out of the four airlines enforce a blanket no refund policy. Matt Levey, Choice’s director of campaigns and communications, has stated that even though airlines will blatantly promote their no refund policy throughout an online checkout, this does not diminish a consumer’s right to a refund and this that this policy is not inline with the law.

Cancellation Fees

Following on from no refunds, airlines have often been found to be charging an excessive cancellation fee if a consumer can no longer make their current flight. Choice finds that sometimes the airline will charge up to 100% of the ticket price or up to $550 for cancellation regardless of the reason.

“The ACCC’s guidance to travel providers said cancellation fees should be reasonable and reflect the actual costs to the business, which is generally 10 per cent of the total cost.” Levey says.

It is especially unfair when consumers accidentally ‘no show’ which leads to the airline cancelling their multiple tickets for connecting flights. An example of this is having an around the world ticket, and missing one leg of this trip would result in a unilateral cancellation of every other trip. As this type of ‘no show clause’ has been banned overseas in countries like Germany and Spain, Choice argues the same should be done in Australia.

No accountability or responsibility when dealing with consumers

Choice argues that airlines are not being held accountable for unfair practices against consumers nor have they been held responsible for being on time, providing exceptional customer service and giving consumers adequate compensation when things go wrong.

Research conducted by Choice has found that if and when airlines do issue compensation for a delayed or cancelled flight, it is very infrequent and irregular. Levey says that “In some cases this leaves travellers paying hefty cancellation fees for flights, which through no fault of their own, are no longer fit for purpose.”


It will be interesting to see whether the ACCC looks into current practices of major Australian airlines and whether any benefits for consumers will actually arise out of this complaint. As it is against the law to display a no refund policy, as all consumers are entitled to a refund if eligible, the ACCC would have reasonable grounds to pursue the airlines, as well as explore the other concerns that Choice has expressed.

What are your thoughts on the current airline situation? Let us know by tagging us #lawpath or @lawpath.

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