Could a passenger bill of rights fly in Australia’s aviation industry?

According to the government stats, in May this year most airlines across all routes arrived an average of 78.6 per cent on time, and 79.6 percent departed on time. This is an increase on figures for last year, but lower than the long-term average of above 80 per cent.

CHOICE has certainly raised the alarm on the propensity of airlines to push the boundaries of consumer law with little to no consequences for doing so.

LSJ spoke with Victoria Roy, principal solicitor and founder of Victory Travel & Cruise Lawyers and travel law spokesperson for the Australian Lawyers Alliance about what a passenger bill of rights would entail.

“Flight cancellations during the pandemic period highlighted a problem that existed for a long time,” she says. “There are significant limitations with the Australian consumer law regarding the aviation market.”

The Rural and Regional Affairs and Transport Legislation Committee currently has an inquiry into the Airline Passenger Protections (Pay on Delay) Bill 2024 (Cth). The Committee is due to release its final report by 18 November 2024. There have been calls for stronger consumer protections, rather than the code of conduct.

The Australian Lawyers Alliance has called for the establishment of a Passenger Bill of Rights that would oblige carriers to financially compensate passengers for delays, cancellations, or denying board to passengers under circumstances which are within the airline’s control.

Further, an update of the Civil Aviation (Carriers’ Liability) Act 1959 is another recommendation, to remedy the gaps where some passengers are left without rights under current laws.

One major concern with the current inquiry is the ALA is the only non-industry party to make a submission. The remainder of the nine submissions are all provided by the airlines and aviation industry organisations.

During a Senate hearing on 15 May, NSW Deputy Leader of the Nationals Senator Perin Davey noted that regional Australians whose flights are cancelled or excessively delayed have often driven two to three hours to reach the airport and that “this bill, while it’s not a silver bullet and while there may still be delays, will make airlines accountable.”

Majority of passengers receive no explanation for cancellation

In December last year, CHOICE published the results of a survey into the flight experiences of 9000 Australians. Two out of five respondents had experienced a flight cancellation or delay in the 12 months prior, and the vast majority – at 85 per cent – were not compensated with meal or accommodation vouchers.

Additionally, 65 per cent were not given an explanation for the cancellation of their flight; 47 per cent received a refund within a month upon application; but 20 per cent didn’t receive a refund for more than six months.

CHOICE and the Consumers’ Federation of Australia have publicly called for passenger rights via a joint submission to the government’s Aviation Green Paper. Their recommendations include:

• minimum compensation arrangements for delayed or cancelled flights
• clearer rights to refunds
• minimum requirements for travel vouchers and credits
• minimum requirements for customer service.

They also want to see the establishment of a new independent travel and tourism industry ombudsman whose remit and powers far surpass those of the industry-funded Airline Customer Advocate.

Bea Sherwood, CHOICE Senior Campaigns and Policy Advisor, told LSJ, “Consumers want and need improved protections in the aviation sector. CHOICE hopes to see the Aviation White Paper appropriately address consumer concerns and outline a plan for the establishment of an independent travel and tourism industry ombud scheme, as well as implement minimum consumer protections.”

Sherwood added, “Minimum consumer protections should include mandatory compensation arrangements for delayed and cancelled flights, similar to the European compensation scheme, as well as clearer rights for refunds and minimum requirements for travel vouchers and credits, customer service and information standards.

“These reforms should be backed by a ban on unfair trading practices and the introduction of penalties for when consumer guarantees are not met. We hope to see the Aviation White Paper recommend these changes.”

The current legislation 

Roy, who has over 15 years’ experience in travel law, says, ”There is no single framework in Australia setting out passenger’s rights to compensation if their flights are delayed or cancelled.”

“They have rights from a few sources, such as airlines’ conditions of carriage, their contracts, and in Australian consumer law but those rights are not specific to aviation, and they are quite vague when it comes to problems that passengers face.”

According to consumer rights and guarantees within the  Australian Consumer Law (Competition and Consumer Act 2010 (Cth), services must be:

1. rendered with due care and skill (s 60)
2. fit for any purpose made known by the consumer (s 61)
3. supplied within a reasonable time (unless otherwise agreed) (s 62)

Roy says, “Section 62 states that service providers have to provide their services within a reasonable time.”

“When you’re a passenger that has been delayed on the way to a medical appointment or a business meeting, there’s no definition for what a reasonable time is. So, the real problem is that consumers have no certainty.”

Other jurisdictions finding a balance

“The first problem with our current system is that it’s vague and complex with no simple, straightforward scheme like we see in other jurisdictions,” Roy says.

“Ultimately, a consumer has to go to court if they want to enforce their case against an airline, which is costly and difficult.”

According to Roy, the most well-established schemes are those in the EU, the post-Brexit UK, and Canada, where their schemes lay out very clear rights to compensation if the reason for a cancellation or delay is within an airline’s control, and that compensation is dependent on the length of the delay.

Roy says, “A Passenger bill of rights would complement rather than replace existing protections. It would be a clear set of rights for consumers, not just for compensation but also around communication requirements regarding how and when airlines inform passengers about delays, and in regard to minimum care standards such as provision of food and drinks.

“There would also be a standardised claim process for lost or delayed luggage, in addition to a vast array of specific issues applicable to air passengers.”

What sort of compensation should passengers receive?

“Ultimately, we need to find a balance between consumers and the aviation sector for the Australian market,” Roy says.

Passengers travelling within the EU are entitled to compensation if their flight was cancelled less than 14 days before the departure date, and airlines must prove passengers were informed their flights had been cancelled.

Passengers who have experienced delays have the right to a refund, and a return flight depending on the delay and distance of the flight.

Roy says the Australian scheme needs to be simple to access and that, like Canada, notification of a decision made by the airlines on compensation following an application should be within 30 days.

“We’re calling for a straightforward scheme that consumers can navigate themselves, so as a first port of call, they’d be applying to the airline for compensation, but we’re calling for an ombudsman or a similar institution to ultimately make decisions if there’s a dispute,” she says.

Domestic and international airlines would be obligated to meet standards

“If Australia established a Passenger bill of rights, it would apply to all airlines that fly here,” says Roy. “Australian airlines are subject to rules under foreign schemes. For example, according to the EU scheme, if a flight from the EU to Australia is delayed, passengers are entitled to compensation under the EU scheme regardless of where the airline is based. This is a point many Australian passengers don’t realise, that they may be covered by foreign schemes in the case of delays or cancellations.”

Are ticket price rises relating to an additional scheme inevitable? No, in short.

“This is one of the reasons airlines are arguing we should not have this scheme,” Roy says. “But … we’re calling for compensation when a delay is within an airline’s control. They can’t control weather or traffic control, for example.

“We submit that there should be a presumption that cancellations or delays were within airline’s control unless they prove otherwise, and that the onus should be on the airline to rebut with why it was not in their control. For a passenger to have to prove it was within an airline’s control would be very difficult.”

In its submission, Virgin Australia said, “Automatic, blunt penalty regimes like the European Union’s passenger compensation scheme risk leading to increased fares, but not necessarily improved customer outcomes or operational performance.”

The ALA is also calling for communication standards, so that as soon as reasonably practicable, once an airline knows it will be delayed or cancelled it should be informing passengers of that flight. They should then also be communicating how passengers can lodge a compensation claim.

Roy says, “The Aviation White Paper hasn’t come out yet but hopefully that will bring some good news for consumers. The Pay on Delay Bill is in the Senate at the moment, so it’s very topical.”

Sherwood says, “The ongoing lack of consumer protections in the aviation sector has severely eroded consumer confidence. Rebuilding this confidence and trust in the industry is essential to its growth, as well as our reputation domestically and abroad, and will benefit both the community and the economy in the lead up to 2050.”