ACCC signals crackdown on Qantas, Virgin Australia fees

ACCC signals crackdown on Qantas, Virgin Australia fees

The Australian Competition and Consumer Commission has flagged potential action against domestic airlines over issues such as  excessive fees for changing or cancelling flights and refusing to provide refunds.

The ACCC will also be paying close attention to airlines' decisions blame mechanical or other issues for cancelling flights when the real cause if often speculated to be due to low passenger loads.

ACCC chairman Rod Sims cautioned the likes of Qantas and Virgin Australia to expect pushback if “consumer issues continue”, citing 1400 passenger complaints – largely concerning 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 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.”

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

Excessive cancellation fees "a major issue"

The consumer watchdog cited the case of a traveller who purchased return flights between Sydney and Los Angeles for four people at a cost of $3,500. When the consumer cancelled the flights more than one month prior to the travel date, the airline charged $2,000 in fees – representing almost 60% of the original fare value.

Sims said that while airlines are free to differentiate their fares based on flexibility, they should not impose 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,” Mr Sims said.

Airlines need to comply with consumer law

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

The passenger requested a refund but was denied by the airline and given a flight credit – despite the fact that, under Australian consumer law, they were entitled to 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, adding that airlines "must deliver on remedies their customers are entitled to without delay or excuse."

The ACCC suggests that travellers should retain any travel documents and records of communications with airlines and contact fair trading agencies or the ACCC with any concerns.

Qantas, Virgin respond

Responding to the ACCC's report, a Qantas spokesman said "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 said it "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.”

David Flynn
David Flynn is the editor of Australian Business Traveller and a bit of a travel tragic with a weakness for good coffee, shopping and lychee martinis.
 

46 comments

  • Dave

    Grannular

    9 Jan, 2018 12:33 pm

    ACCC = Toothless Tiger
    I wonder sometimes if they just release press statements to make it look like they are actually doing something
    Member who gave thanks

    Glenn1234

  • Bob Burgess

    Bob Burgess

    9 Jan, 2018 12:37 pm

    Toothless? Only last month the ACCC blocked BP's takeover of Woolworths service stations, see http://www.abc.net.au/news/2017-12-14/bp-blocked-from-woolworths-service-station-takeover/9258134
    No member give thanks

  • THR

    THR

    9 Jan, 2018 08:20 pm

    BP are still to challenge and analyst consensus is they will win.
    No member give thanks

  • hutch

    hutch

    9 Jan, 2018 12:42 pm

    In fairness, even if they are toothless, it would be because the government has not given them the teeth.
    Member who gave thanks

    tom m

  • THOMAS MITCHELL

    tom m

    10 Jan, 2018 03:43 pm

    I am in 100% in agreement , too many corporations have too much power. Its why I am still 100% against the TPP and the TISA they would have gone for if thye got the TPP.
    No member give thanks

  • Davedownunder

    Davedownunder

    10 Jan, 2018 11:20 pm

    Not even a tiger. They didnt do anything about the rip off on the monopoly on airport car parking. When a company makes 70% return on investment because they can I would have thought it was time to act. Drop a family member off and say goodbuy $5 for 20 mins.

    Sorry ACCC you need to re group and think why we the people have you there to represent us. Maybe time to visit the dentist.👎
    No member give thanks

  • Erin Judge

    ezzej

    10 Jan, 2018 11:44 pm

    Being with Qantas is like being stuck in an abusive relationship. It's starting to become very clear that the profits they've made over the past two years are at the expense of the customer experience. I actually feel stuck because they're the only viable international carrier for an Australian (if you want to boost in a loyalty program) but it does make me feel very depressed. Definitely not how I want my customers to feel. Apart from a series of disenfranchising experiences with them over the past couple of years, I'm currently going through a painful communication with their awful and far removed support set-up to dispute a refund missing more than $600 on a full flex fare ticket they actually forced us to purchase a return flight, at time of check-in on our out-going flight (which they were of course happy to sell us as a one way flight at the time). It took two weeks of chasing them to even get the original refund processed. We haven't yet received a sensible response from them. Apparently on a full flex fare ticket, they still are charging over $250 each for cancellation (I thought that was the point of full flex) and the rest our bank must have taken in fees... for a refund into our account? This is where I hysterically laugh... and cry. It is criminal. Not just the act but how long they bank the interest for during this long and painful comms with incompetence and a lack of care.
    Member who gave thanks

    tessacate

  • patrickk

    patrickk

    13 Jan, 2018 01:31 pm

    I was on a QF codesahre flight to Bangkok the other day and it was an hour late, and as there were only two of us QF did not hold the connecting Sydney flight, which is fine, but then instead of putting us on the Emirates flight an hour later (which had seats) QF defined to ticket us and had us wait until the next day. Status and fare type did not count. The bean counters did not want to give Emirates the money, despite the disruption to the passengers. I thought it was next available but obviously not..
    Member who gave thanks

    tessacate

  • willvill

    willvill

    9 Jan, 2018 12:58 pm

    Distressed inventory....airlines are not the only business with that dilemma, but the only ones with exorbitant get out fees.
    Members who gave thanks

    tom m, mikes1917

  • gumshoe

    gumshoe

    9 Jan, 2018 01:42 pm

    And the ACCC should have a look at the outrageous QF award booking fees which are about 3 to 4 times what CX and AA charge.
    Members who gave thanks

    AnneS, tessacate

  • hutch

    hutch

    9 Jan, 2018 02:05 pm

    I can't see how the ACCC would have power to do so.
    No member give thanks

  • eq_syd

    eq_syd

    9 Jan, 2018 02:43 pm

    That is really the killer, isn’t it?!
    In above case, buying a $850 or so sale fare to LAX and being hit with $300+ cancel fees perhaps not hugely inappropriate.
    However, the many hundreds of dollars charged as fuel??/surcharge on reward seats is just enraging.
    It’s not clear for the consumer what the true and total outlay to redeem will be (before collecting points) as well as not being able to fairly compare to other airlines who have dropped the surcharges and reverted to pure taxes.
    It’s also just plain bad form. Qantas effectively didn’t remove fuel surcharges after the genuine fuel crisis years ago and consumers are being royalty gouged.
    I really wish something could be done about this.
    Members who gave thanks

    Doubleplatinum, tessacate

  • highflyer

    highflyer

    9 Jan, 2018 01:43 pm

    Wonder if Australia will ever adapt something similar to the EU flight compensation regulations. Would be nice to keep all airlines accountable.
    Members who gave thanks

    tom m, tessacate

  • hutch

    hutch

    9 Jan, 2018 02:02 pm

    Some form of mandated compensation would be a welcome addition.
    Member who gave thanks

    tessacate

  • jubbing

    jubbing

    9 Jan, 2018 02:18 pm

    Qantas' statement in response to the ACCC rings a lot of alarm bells for me - and it potentially shows they are in the wrong - the way they worded it.

    I'll be interested to see if anything actually happens.
    Member who gave thanks

    tessacate

  • peteshep

    peteshep

    9 Jan, 2018 08:28 pm

    Agree. And that is completely untrue what they said about terms being clear. The conditions of carriage are clear, but after you book, the terms of a specific ticket are virtually impossible to find. They’re not in the itinerary that is emailed out nor can they be found in the booking online - only links to the generic terms. Credit vouchers are even more difficult. The number of times I’ve had to argue with the QF call centre when rebooking over the phone is ludicrous - and it’s virtually impossible to find documentation to prove your point unless you’ve got screenshots from the original booking. Last time they even tried to add an extra fee (the $25 call centre fee, or whatever it is) even thought the website wouldn’t let me change online - they claimed it was because the routing was changing, but the conditions of cancelling the original ticket for a voucher said it could be used “anywhere on the Qantas network” and the only fee was the $88 change fee. It’s about time the ACCC did something about this rubbish.
    Member who gave thanks

    tessacate

  • mik_64

    mik_64

    10 Jan, 2018 10:40 pm

    And even if you take screenshot QF just ignore it as T&C are at best a guide for them but for you all the T&C no matter where they are on the dark web are like biblical documents
    No member give thanks

  • Doubleplatinum

    Doubleplatinum
    Banned

    9 Jan, 2018 03:39 pm

    If you want a flexible ticket pay for it, simple. All the whingers want to be able to have their cake and eat it too.
    Member who gave thanks

    gazza48

  • mo

    mo

    9 Jan, 2018 05:22 pm

    I disagree. If an airline can resell your seat, surely it would be reasonable for them to return some of the cost to you.
    No member give thanks

  • Doubleplatinum

    Doubleplatinum
    Banned

    9 Jan, 2018 07:36 pm

    Reasonable? You are mistaking a business for a charity.
    Members who gave thanks

    ttravers, gazza48

  • GBRGB

    GBRGB

    9 Jan, 2018 07:56 pm

    QF and VA are effectively a duopoly and operate and enjoy favourable consideration in a protected market by Govt law, therefore a more stringent level of consumer protection and obligation should be expected in return, it cuts both ways.
    Member who gave thanks

    tessacate

  • kimshep

    kimshep

    9 Jan, 2018 08:07 pm

    I hope that you are not a QF employee, doubleplatinum?

    Clearly the ACCC 'ain't happy' with this situation .. and neither are airline customers. The only charity here is the customer paxs) who are routinely being taken to the cleaners by avaricious corporate policies, which fail to reflect existing Government retail laws.

    1. In the first case, 1 month cancellation is more than adequate notification to be able to sell the affected seats on a prime route - and probably saleable at a higher price than originally paid.

    2. In the second case, as an airline you cancel the flight, are unable to provide a later departure on the same date, inconvenience the passenger and then hold them to ransom by issuing a flight voucher, which may or may not be used by the passenger. Coersive behaviour and not a great customer retention tool. You (the airline) have failed to provide the service and then you want to nail the customer to the cross for your poor judgement / actions.

    In time, we will get a Bill of Passenger rights - which is certainly overdue in this country. QF in particular is fond of baying about a 'level playing field' ... but apparently this doesn't extend to their customers.

    Member who gave thanks

    tessacate

  • Rotate

    Rotate

    10 Jan, 2018 01:51 pm

    "I hope that you are not a QF employee, doubleplatinum?"...
    Yes, good question. The trend of his/her comments on this site seems to display a level of defensiveness towards QF that's not entirely on the level.
    Member who gave thanks

    JamesR

  • Doubleplatinum

    Doubleplatinum
    Banned

    10 Jan, 2018 01:56 pm

    Not even in the industry, I used to be an air traffic controller but back in pharmaceuticals now. My defensiveness is to stupidity, not QF.
    Member who gave thanks

    ttravers

  • Marcus

    desafinado74

    9 Jan, 2018 08:12 pm

    Airlines charging people who use credit cards to pay for fares should be punished too. These companies are big enough to absorb the merchant fees.
    No member give thanks

  • cloud-9

    cloud-9

    10 Jan, 2018 09:37 pm

    The EU has legislated against credit card fees as from 12 Jan 2018. BA dropped their fees today ☺
    No member give thanks

  • Amp-qld

    Amp-qld

    10 Jan, 2018 03:04 pm

    With regard to airlines claiming mechanical faults to blame instead of low passenger number, consumers may be better off with that as many travel insurances do cover extra costs for mechanical failures but don't cover cancellations due to low passenger numbers at all. In the latter case, you can only claim back the original fare, not extra costs.
    No member give thanks

  • Amp-qld

    Amp-qld

    10 Jan, 2018 03:06 pm

    I think Qantas (supposedly a full service airline) are really rude charging to choose an ordinary seat.
    No member give thanks

  • UpUpAndAway

    UpUpAndAway

    10 Jan, 2018 03:13 pm

    Reading the Qantas response, I think they are going to learn the hard way.
    No member give thanks

  • zoomzoom

    zoomzoom

    10 Jan, 2018 03:13 pm

    QF is a disgrace in this area. The Chinese Government forced it to reduce taxes and charges on HK issued tickets. QF have been ripping FF members off for years, especially on award flights, taxes, charges , fuel surcharges, etc........all goes to paying the massively excessive bonus to the CEO. The QF Board is the ultimate club. Exploiting a dominant market position in Australia.
    No member give thanks

  • bcnsw

    bcnsw

    10 Jan, 2018 03:15 pm

    I think the ACCC have no juristiction on airlines.no one ahs they re a law unto themselves I was in teh second Bali erruption where flights we cancelled I chose to return home on a points ticekt via sing and when i asked virgin to re book my J fare in January they refused and put the money in credit which I refused as i could not use so it expired.no one inc Fair trading or the airline passenger association could help.
    No member give thanks

  • UKEagleinAus

    UKEagleinAus

    10 Jan, 2018 03:23 pm

    Like many probably are on here, I am for all intents and purposes a triple/quadruple platinum flyer annually. I welcome any crack down on scandalous fees and hidden charges. Just because I can afford to buy flexible tickets, I don't go around knocking the rights of others who cannot.

    No member give thanks

  • Anthony Spasevski

    Zaps1971

    10 Jan, 2018 03:23 pm

    Qantas & Virgin have fixed the problem with ACCC ,all members investergating fromACCC have revived free flights & life lounge access.
    Now go away ACCC..
    No member give thanks

  • Jazzop

    Jazzop

    10 Jan, 2018 03:35 pm

    I submitted two claims to the ACCC when VA charged me a $500 cancellation fee for a fully flexible BNE - JFK ticket.

    VA's argument was it was all stated in the Ts and Cs. BUT, whilst it's stated in the Ts and Cs, it's only for certain fair types, and using the fully flexible fare as an example, at the time there were 6 different fare types categorised as 'fully flexible'. The ranged from having no cancellation fees to a $500 cancellation fee. The only way you knew was clicking on a link in the booking engine and knowing that of the 6 to 8 character code, it was the first letter.

    Explain to me how that is being transparent and not exploiting their fiduciary position?

    Like I said I complained twice to ACCC, with screen shots and full disclosure. They said they could do nothing and it was a state consumer affairs issue. QLD consumer affairs said they could nothing about it. And the Airline industry ombudsman refused to look into it because I lodged a complaint with the ACCC. I even emailed my Fed MP and the minister responsibile for the ACCC. Neither replied. I emailed VA directly, they responded initially and then nothing.

    So, I call BS on this statement by the ACCC. They are completely useless, as is the consumer protection laws.

    I gave VA the $500... and then booked my next four return trips to the US with QF. 2 were just me for work to JFK & Tampa, 1 was to LA with my family of 4, and one was to JFK for my wife and I. Plus as I'd gotten Gold by then, I now spend half my time with QF domestically. So, VA got their $500 but lost a lot more in return.
    No member give thanks

  • THOMAS MITCHELL

    tom m

    25 Jan, 2018 01:43 pm

    I have done this to Qantas for their mulitplehassles and over the years thye have lost $30-40K to virgin
    No member give thanks

  • gail stephens

    gazza48

    10 Jan, 2018 03:56 pm

    Upfront I will say I am a former airline employee who had to deal on a daily basis with paxs who purchased the lowest fare possible but wanted all the flexibility of the higher fares! When a bkg is made it gives the person making the bkg all the fare rules of the fare they are purchasing. Unfortunately most people just tick the box to move to the next page and they openly tell you that nobody reads the rules!! Whenever there were compassionate circumstances many rules were waived. Have to agree the change fees can be a little steep and in a lot of cases you may as well buy a new tkt which is what was recommended to paxs on many occasions....ACCC could do well to look into the petrol industry and see why there is price gouging considering the US/SGD dollar price and the cost of a barrel of oil. Won't go down that path as the govt reaps to much revenue from the petrol! End of my imput!!lol
    No member give thanks

  • Jazzop

    Jazzop

    10 Jan, 2018 05:59 pm

    What about pax who purchased 'fully flexible' fares and had to pay a cancellation fee? And, if you look to contract law, and provision, penalty etc must be clearly articulated. The airlines bury them in fine print. The See my post just above yours :)
    Oh and Choice did an investigation on this last year and demonstrated how the websites time out before you can read all the Ts and Cs.
    No member give thanks

  • Pointsnerd

    Pointsnerd

    10 Jan, 2018 04:13 pm

    You are not entitled to a refund if you need to cancel. If there is a change to the flight you are entitled to a refund as what they are offering you is not what you were sold. Jetstar changed my flight time by 1 and half hours so I asked for a refund. They initially said no and said it was their policy to only offer credit. Quoted consumer law to the supervisor and was given a refund. Their policies do not match with consumer law
    No member give thanks

  • Timmy22bc

    Timmy22bc

    10 Jan, 2018 05:34 pm

    I hope they really give it to them & then attack fuel surcharges & reward bookings.
    No member give thanks

  • Winston Doyle

    winno

    11 Jan, 2018 09:13 am

    We won't travel Qantas! For the past twenty years, mostly because of the staff attitude, we have selected other airlines .
    No member give thanks

  • mike kearney

    Bonzer Mike

    12 Jan, 2018 07:47 pm

    Winno i am like you they are extremely arrogant and the company is all about ripping off their customers to make more money and reward senior executives with large bonuses.
    No member give thanks

  • flyOFTEN

    flyOFTEN

    18 Jan, 2018 01:26 pm

    most cheaper tickets are non-refundable including the cheaper business class fares. That said many airline now allow name changes for a fee, so non-refundable, but can be sold or given to anyone, by simply paying name change fee.

    No member give thanks

  • THOMAS MITCHELL

    tom m

    25 Jan, 2018 01:41 pm

    When I have had to cancel a flight I have left the flight in credit. You have 12 months to use it. The fee's are lower and its better used in the ends. I am a medium level flyer and do get the chance to use it later, that helps me.

    If your fare is quoted as fully flexible then that's what is should be and there should be no fine print. Just stick to the plain English interpretation of the words and live up to it. They use those words to get you to buy a more expensive airfare, not living up to it is fraud and theft.
    No member give thanks

  • Troy Swindells-Grose

    TSG71

    9 Feb, 2018 11:00 am

    Qantas' response in the above shows both their arrogance and sheer contempt for both ACCC and their consumers. I booked and paid for a "non refundable" fare for a senior (who had a fall). Initially booked 17th Apr 2017, the flight dates changed (at another ridiculous additional cost of course) on 18th Aug 2017 and then it was ultimately cancelled on 25th Sept 2017 - for flight departing 17th NOV! Are you seriously telling me you couldn't resell that ticket? In early 2018 I finally get an email from them advising of the "credit" for my cancellation. Attempting to use it, I'm slugged with a $99 "change fee" (for the work that I did online and on the phone to them) and THEN it's locked to the original passengers name (despite having paid for it myself). I can unlock it for... guess what... another $99! So, they entrap you by not simply issuing a refund (which would be reasonable, given the notice - regardless of the T&Cs) and then illegally "tax" as much as they can back. Disgraceful behaviour. Attempting to explain all this on the phone, I met with a brick wall and when I asked for a supervisor was placed on hold for another 15mins only to have the same person return and say "my supervisor told me to tell you that they would just be saying the same thing". And to the corporate muppet who provided the above quote about "our terms are clearly laid out" - they are also deliberately obfuscated - something which the ACCC had success in taking the major telcos to task for... I hope they beat you soundly with the same stick... you deserve it.
    No member give thanks

  • flyOFTEN

    flyOFTEN

    10 Feb, 2018 12:33 am

    What part of non-refundable do you not understand?

    Many flights operate full & many operate with a low load factor.
    No member give thanks

  • flyOFTEN

    flyOFTEN

    10 Feb, 2018 12:34 am

    With australias incredibly high wages & employment perks its going to cost you for any human interaction.
    No member give thanks

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12 Dec, 2018 11:43 pm

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