No refund, cancellation policies are Australian airlines biggest rip-offs

AIRLINES making illegal ‘no refund’ claims and stinging passengers hefty cancellation fees may be flouting Australian consumer law, an investigation reveals.

EXCLUSIVE

AIRLINES’ “no refund” policies are illegal and their cancellation fees are up to 10 times what they should be, an investigation claims.

Consumer group Choice is urging the ACCC to intervene after it found the fee for cancellation is commonly the loss of the whole fare instead of the actual expense to the business, which it argues is generally 10 per cent of the fare.

“When you see a 100 per cent cancellation fee for a fare booked four months out, is that only recovering costs or penalising people?” said Choice campaigns director Matt Levey.

In a 65-page “super complaint” to the Australian Competition and Consumer Commission, Choice highlights the experience of Daniel Kruk and Sarah Haar, who bought a New York return flight with Qantas.

Daniel Kruk and Sarah Haar planned to elope and take a round the world trip. They bought tickets through Qantas. Twice Qantas changed the flight dates so, when given the option, the couple decided to cancel. There was no advisory about potential fees for doing so. Yet Qantas stung them for $800. Picture: Sarah Matray

The airline made two minor changes to the journey, which the couple accepted.

They then received an email that indicated a flight was being moved by two months. So they cancelled and were hit with more than $800 in fees.

A Qantas spokesman said: “There are a few inconsistencies with this case study that we’ve had difficulty reconciling. Our records show the itinerary changes were limited to time adjustments of less than one hour in total. The ticket was purchased as part of an offer only available via Qantas employees and therefore had tight restrictions, which were very clear at the time of booking.”

Choice said Qantas, its offshoot Jetstar and Virgin Australia are flouting the Australian Consumer Law (ACL) with blanket no-refund policies.

Tigerair’s behaviour is not so bad, Choice said, because its no-refund policy applies only where the passenger decides to not travel.

ACCC chairman Rod Sims said it would review the Choice report for “potential breaches of consumer guarantees or unfair contract terms”.

The Qantas spokesman said: “The Choice report is selective about facts and mischaracterises the law around refunds.”

The couple planned to elope and take a round the world trip. Picture: Sarah Matray

Qantas’s terms and conditions comply with the ACL and are clearly disclosed, the spokesman said.

He added: “We understand life can get in the way of the best-laid travel plans, which is why we do offer refunds under certain circumstances.”

A Jetstar spokesman said “Choice’s report shows a complete misunderstanding of Australia’s consumer laws and how airlines work.” Its terms and conditions complied with the law and refunds were provided in a “range of different scenarios”.

A Virgin Australia spokeswoman said it “always complies with the ACL”.

Tigerair does too, a spokeswoman said.

“While Tigerair fares are generally non-refundable where the guest changes their mind — typical of the low cost model — customers have a cooling-off period of 24 hours after booking a flight to request changes to their booking free of charge, provided travel has not commenced,” the spokeswoman said.