AUSTRALIA: Passenger protections go to Senate enquiry

Australia’s airline industry is under fire again, with renewed scrutiny on passenger rights and compensation for delays and cancellations at a Senate inquiry.

It looks like Qantas will need to be dragged kicking and screaming to compensate consumers for not delivering flights on time. Remember this is the airline that tried to argue that when a consumer bought a ticket it was only buying rights to travel, and not a flight at a specific time!

At a Senate inquiry on Monday, March 17, Qantas domestic CEO Markus Svensson resisted an EU-style compensation scheme, arguing it would drive up ticket prices without improving reliability.

Qantas Rejects Compensation-Based Protections

Svensson told the inquiry that international compensation models, like those in Europe and Canada, had not reduced delays or cancellations. Instead, he claimed, they had only increased travel costs.

“Compensation-based regimes do not deliver better outcomes for consumers in terms of reduced delays and cancellations, and they increase the cost of travel.”

Markus Svensson, Qantas domestic CEO

He warned of potential impacts on fares, low-cost carriers, and regional routes. But strangely not the joy compensation would bring to passengers.

Qantas insists that when cancellations or delays are within its control, the airline already provides refunds, rebookings, or other legally required remedies. Yes, of you protest loudly and wait long enough! Having said that as the experience of many customers reporting on social media, my personal experience of refunds for cancelled flights — by me has been more customer friendly.

Inquiry Seeks Stronger Passenger Protections

The inquiry into the airline passenger protections bill follows a series of Qantas scandals, including the airline being fined $120 million in 2024 for selling tickets on already-cancelled flights. The airline also faced backlash for ‘forcing’ customers to accept travel credits instead of refunds for pandemic disruptions.

Nationals senator Bridget McKenzie, who is leading the charge for stronger protections, and not for the first time, referenced Qantas’ sale of ‘ghost tickets‘ as proof of the need for mandatory compensation rules.

“That was an explicit breach of consumer trust. If Qantas was willing to knowingly sell those ‘ghost tickets,’ why should passengers trust that voluntary protections are enough?”

Bridget McKenzie, Nationals Senator

I’m not usually a supporter of anyone from the National Party, but Bridget sometimes hits the heart of the matter.

The proposed ‘pay on delay’ legislation, introduced by the Coalition, the opposition in the Australian parlliament, would impose penalties on airlines for flight delays, cancellations, and denied boardings. It is separate from the government’s planned Ombuds Scheme, which aims to give regulators more enforcement power over poor airline service.

Stronger Complaint Handling says Virgin Australia

Virgin Australia’s government affairs spokesman, Stephen Beckett, signaled support for a “beefed up” complaints system with binding decisions and better consumer law awareness.

Meanwhile, consumer advocate Adam Glezer highlighted the lack of competition in the Australian market, dominated by Qantas and Virgin, and both airlines’ ability to cancel flights without consequence.

“We’ve got a duopoly, and we’ve got no consequences if they delay, cancel flights, whatever it might be,” Glezer said.

Adam Glezer, Consumer Advocate

Airlines Profiting Despite Service Woes

Despite ongoing customer service controversies, Qantas and its budget carrier Jetstar have rebounded financially, posting a $1.39 billion half-year profit in December 2024. Jetstar alone saw a 35% surge in earnings.

Legal experts warn that airline cancellations often stem from operational decisions rather than unavoidable disruptions like weather or air traffic control. Dean Long of the Australian Travel Industry Association argued that real reform would require financial penalties to deter airlines from poor service.

The Senate hearing got off to a frosty start when McKenzie criticized Svensson for failing to attend in person.

“I thought things were going to be different under the new leadership”

Bridget McKenzie quipped. She was referring to statements by new Qantas CEO Vanessa Hudson, who replaced Alan Joyce in 2023. She couldn’t help herself by drawing a parallel between the Qantas late submission and Markus Svensson’s failure to appear in person. He appeared via video link.

2PAXfly Takeout

The Senate inquiry will add to the mounting pressure for airlines to face tougher consequences when they fail travelers.

The irony is that the Coalition, through Bridgit McKenzie, traditionally supports big business. In the currently topsy-turvy world of politics, it is now championing travellers’ rights. That’s usually the province of the more progressive parties like Labor, The Teals or the Greens.

It remains to be seen whether the current Labor government will amend its legislation and support a compensation scheme or rely on regulatory enforcement.