Unexpected support for an Australian compo scheme for passengers of delayed flights

Compensation for airline passengers disrupted by flight delays and cancellations has won unexpected support from Emirates.

The federal government aviation white paper is examining whether a compensation scheme for travellers impacted by flight delays is needed. Picture: iStock

Consideration of a compensation scheme for Australian travellers disrupted by flight delays or cancellations has won unexpected support from the head of Emirates.

Greater consumer protection is being considered as part of the federal government’s aviation white paper which will determine policy for the industry in the years ahead.

Compensation schemes already exist in many other parts of the world, providing travellers with hundreds of dollars compensation for excessive flight delays and cancellations that are within the airline’s control.

In-depth analysis commissioned by the Australian Travel Industry Association, provided evidence domestic carriers are cancelling some flights solely for commercial reasons.

Emirates President Tim Clark said airlines that put their own financial interests ahead of those of their passengers should be held to account.

“If an airline is holding itself out for higher reward and through its own inability to meet its obligations (cancels or delays flights) then it’s not unreasonable that they should be called out and made in some respect to compensate passengers,” said Sir Tim.

“But if the Australian government is of a mind to do this, it needs to consult with the aviation community to establish the structure to ensure a modicum of balance between what the consumers want, and what the airlines are going to be held to account for.”

Emirates president Tim Clark supports compensation for passengers disrupted by flight delays, when airlines seek to put financial interests ahead of their customers. Picture: Christian Charisus/DPA/Zuma Press

In Canada travellers were entitled to $125 if their flight arrived between three and six hours late, and $250 if the flight was over six hours behind schedule.

The European Union required airlines to pay from $400 for delays of three hours or more for flights of 1500km, and $650 for longer distance flights.

Brazilian laws were even tougher on airlines, with passengers entitled to up to $1800 for delays and cancellations and $690 if they were denied boarding.

In the US, compensation was restricted to passengers “bumped” from flights because they were oversold by the airline.

Sir Tim said there were “elements of unreasonableness in the European legislation and in Brazil” where airlines were not consulted by lawmakers.

“I think this came to the fore with the volcanic ash cloud when airlines were fined for not meeting obligations and we said ‘well we weren’t allowed to fly’ and the legislators said ‘that’s not our problem’,” he said.

“That’s the kind of unreasonableness that works through the system so all we’re saying is structure legislation that accepts there are large elements that affect the operation of airlines.”

The Australian Lawyers Alliance was among the most vocal supporters of greater consumer protection in its submission to the aviation white paper.

Chair of the ALA’s travel law special interest group Victoria Roy said air travel was essential for Australians to do business, take a holiday and visit family and friends yet consumer protections were far fewer than in the US, the UK, Europe and Canada.

“The ALA considers the lack of a flight delay compensation scheme in Australia to be such a significant issue for Australian air passengers that it should be identified as a specific area for consideration in the aviation white paper’s terms of reference,” said Ms Roy.

The Queensland Consumers’ Association also criticised the “inadequate” arrangements currently provided by airlines for refunds, credits and compensation.

However Qantas’s submission to the white paper warned of the “spiralling costs of the EU program” and questioned whether the scheme was “incentivising improved resilience and performance across the aviation ecosystem”.

Its submission to the aviation white paper, also asked that the government consider the “considerable support already offered to passengers by airlines for events within their control and the consumer guarantees framework in Australian Consumer Law”.

Similarly Virgin Australia warned of the risk of higher fares in the event an “automatic, blunt” regime such as that in the EU was adopted, and said airlines were already incentivised to meet their obligations to customers.

The final aviation white paper is due for release mid-year.

Originally published as Unexpected support for an Australian compo scheme for passengers of delayed flights