Compensation for delayed and cancelled flights in Australia compared to US and Europe

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Compensation for delayed and cancelled flights in Australia compared to US and Europe

By Michael Gebicki
In some other countries passengers can claim significant compensation for delayed flights.

In some other countries passengers can claim significant compensation for delayed flights. Credit: Getty Images

Australian flyers are in a world of pain right now. Flight delays, cancellations, lost baggage, downgrades – flying in Australia has become a lottery, and complaints have mushroomed.

It's not just us. Other countries are having similar problems, but how are travellers in Europe and North America treated when their airlines fail to deliver?

Delays and cancellations

If your flight is delayed or cancelled, the rules for compensation are generally set by the country the flight is departing from. A Qantas codeshare flight operating out of Vancouver is governed by Canada's Air Passenger Protection Regulations, which state if a passenger's flight is delayed by between three and six hours and the disruption is the fault of the airline the passenger is entitled to compensation of $C400 ($A429). A delay of six to nine hours and the compensation is $C700 ($A752).

In Australia, it's up to the airline to decide what happens. If Qantas delays a flight for two hours or more and the delay is within Qantas' control, the airline will give you a meal voucher. If the delay is more than 12 hours and the departure is from an away-from-home airport, Qantas will compensate you to the value of $200 for hotel accommodation. However if it's your home airport, compensation is limited to a taxi fare to your home address.

Virgin Australia also provides meal vouchers or "reasonable" meal costs for delays of two hours or more. If your flight is delayed overnight VA's compensation policy is the same as Qantas', except that compensation for accommodation at an away-from-home port is capped at $220 per night.

The most flyer-friendly regulations apply to flights originating within the European Union, where passengers whose flight departure is delayed for two hours are entitled to compensation depending on flight distance. For a flight of 1500 kilometres or less the compensation is €250 ($390), increasing progressively to flights over 3500 kilometres, for which the compensation is €600 ($935). Passengers are also entitled to food and hotel accommodation if required during the delay.

In the USA the Department of Transportation (DOT) sets the rules but there is no statutory right to compensation for delayed flights. According to the DOT website, "If your flight is experiencing a long delay, ask airline staff if they will pay for meals or a hotel room. While some airlines offer these amenities to passengers, others do not."

Bumped

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Airlines commonly overbook, based on the assumption that some passengers will change their mind at the last minute, or fail to show up for their flight. However if all those passengers check in, some will need to be bumped from their booked flight and given a seat on another flight.

If that happens in the US, DOT rules require the airline to first ask if any passenger is willing to voluntarily give up their seat. At the departure gate airline staff will make an announcement asking for passengers prepared to vacate their seat in return for cash – usually around $US200 ($288) - and a guaranteed seat on the next flight. If not enough passengers accept, staff might progressively increase the bait.

If there are still more passengers than seats, passengers may be selectively bumped, "involuntary denied boarding" in DOT parlance. For those passengers, the compensation depends on the price they paid for their ticket and the amount of time they'll be delayed in getting to their destination, governed by federal regulations. Passengers on domestic flights delayed by 1-2 hours are entitled to double the cost of the one-way fare, but airlines can cap the payout at $US775 ($1115). If the delay is more than two hours the passenger is entitled to four times the value of the one-way fare, capped at $US1550 ($2230).

That's not what happens in Australia. According to Virgin Australia, "On rare occasions we may request for volunteers to move to a later flight. If we do not get any volunteers, we may need to involuntarily move you to a new flight to the same destination. If that flight departs more than two hours after the flight you were booked on the airline will provide you with a credit voucher to the value of $100 for domestic and international short haul flights."

Downgraded

Downgrades from business class to economy are not uncommon these days. Aircraft are flying at close to full capacity and excess passengers are being shunted from premium classes to economy. In June 2022, Colleen Hanley and her husband of Cammeray, NSW, were downgraded from the business-class seats they'd booked aboard QF9, Qantas' non-stop service from Australia to London. The reason was a pilot being repositioned, and a pilot flying to another location to take command of an aircraft gets a business class seat.

At the time Qantas staff advised the Hanleys they would receive a refund of the difference between the business fare they paid and the economy seat they flew in. They subsequently lodged a query on Qantas' customer care online portal and five months later, after no communication from the airline, Colleen Hanley called and was told the case was closed. After further prodding, Qantas reimbursed the couple $1000 each. Shortly after that they received a further payment of $1500 each.

The return business-class fare the Hanleys paid was $8525 each. Suppose the Australia-London sector cost half that amount, $4262.50, then Qantas priced the Hanleys' economy class seat on that flight at $1762.50. That's probably more than they would have paid for that sector if they'd booked an economy class seat, but not by much. Qantas effectively earned more for the seat than if they'd sold it to an economy passenger – and the Hanleys got a lesser payout.

If the Hanleys were downgraded on a flight originating within the EU, they would have been entitled to a refund based on the ticket price and the distance flown. For a flight less than 1500kms the refund is 30 per cent of the original ticket price, 50 per cent for a flight between 1500-3500kms and 75 per cent for a flight over 3500kms. Instead of a $2500 refund, they would have been entitled to about $3197, assuming the one-way fare was around $4262.

How are our airlines allowed to get away with it?

Our government has taken its hands of the wheel and allowed our airlines to set their own terms and conditions. At the end of 2009, the National Aviation Policy White Paper highlighted the need to safeguard the interests of consumers, however "the Government is reluctant to burden industry with further regulations in this area." While noting that the government would consider intervention should this become necessary, nothing has been done. Instead, Australia's major airlines established their own adjudicator, the Airline Customer Advocate (ACA), founded by and funded by the airlines.

The ACA sets a high bar for complaints against the airlines. For a complaint against an airline to be eligible it must first be submitted to the airline itself. If the response is not satisfactory, the complainant must request a review, and await a final determination before presenting their case to the ACA. According to its annual report for 2021 – there is currently no report for 2022 – the ACA received just one eligible complaint for every 40,000 passengers who flew.

Where do we go from here?

Adam Glezer, consumer advocate from Consumer Champion (consumerchampion.com.au) is crystal clear; it requires government intevention.

"The government needs to introduce legislation that penalises airlines when their performance falls short of what consumers have paid for. Airlines have been allowed to write the rules on how they operate and that puts the consumer at their mercy.

"When flights are delayed or cancelled, consumers' entitlements are dictated by the airline's conditions of carriage. Apart from the frustration, a lot of the time their holidays are being impacted.

"They might miss out on accommodation or even a cruise but there's no compensation if the airline does not fly them to the destination they paid for in a timely manner. The federal government needs strict rules enforcing compensation for significant delays and cancellations, and stipulating when they have to be paid".

According to Glezer, the EU's Regulation 261, which covers air passengers' rights, provides a template for the legislation Australian flyers need.

"EU261 has been a game changer in the EU. If consumers experience lengthy delays due to reasons within the airlines' control, they receive significant compensation and that's the way it should be here. It acts as a deterrent for airlines that do the wrong thing by their customers."

However, there are no signs the federal government is prepared to step in with similar legislation.

"Not at this stage, anyway," says Glezer. "I have been advocating for this since the pandemic started in 2020, but no action has been taken. It appears there is no intention for the government to protect air travellers even though they're being taken advantage of. Their priority appears to be protecting the airlines."

Who is really to blame?

While air travel might feel like a race to the bottom, the past couple of decades have proven that many flyers will put up with inconvenience and shoddy treatment in return for a cheaper airfare.

Witness the rise of low-cost carriers, which charge extra for every checked bag, meal and glass of water. You get what you pay for, so do we deserve the treatment we're getting?

In the EU and North America there are dozens of low-cost carriers. While they might be intensely disliked, they manage to operate within rules that ensure flyers get a square deal.

FIVE THINGS AUSTRALIAN AIRLINES DO GET RIGHT

Safety

Australia is one of the safest countries in the world for airline passengers. Even in an emergency, such as the Qantas flight which recently lost power in one of its two engines while crossing the Tasman from New Zealand, the pilots handled the situation coolly and professionally. There was no apparent panic on board and the aircraft landed safely.

Customer-facing service

There are exceptions – anyone can have an off day – but the check-in staff and cabin crew who are the face of Australia's airlines do a fantastic job. Calm, courteous and sympathetic, they often go the extra mile to make our inflight experience happy as well as safe, and they deserve respect. A smile and a "thank you" when you exit the cabin won't go astray either.

Frequency

On the major inter-city trunk routes we're spoiled for choice. There are dozens of flights every day between these ports, as proven by the return of the Melbourne-Sydney sector to the list of the world's most popular air routes. The emergence of Queensland-based regional low-cost carrier Bonza brings yet more choice to the table, especially for east-coast regional Australia.

Airfares

Believe it or not, in terms of mileage, the price we pay to fly domestically is similar to the price you would pay on an intra-European flight aboard a legacy carrier. Book as early as possible, avoid popular times and days and major holiday periods and you're in the winners' circle.

Inflight Wi-Fi

Qantas finally now has it, free and fast on many of its domestic Boeing 737 and Airbus A330 flights. Aboard Virgin Australia it's user-pays, except for upper-echelon frequent flyers for whom it's free. Also free for all, more than 400 hours of inflight entertainment streamed to your device via your browser.

See also: How to get VIP treatment at the airport - without flying business class

See also: Want to fly to Europe this year? Expect to pay double

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