‘Mandatory compensation’ would push fares up, Qantas claims

Qantas is warning that the introduction of a compensation scheme for customers whose flights are cancelled or delayed will only push up airfares even more, and will do nothing to fix the problem.

The national airline was responding to the federal government’s Aviation Green Paper, a public discussion on the state of the airline industry, involving all key stakeholders.

The paper is intended to be the first step in a 30-year strategy to reform and modernise Australia’s aviation industry.

It comes on the back of a not-so-great year for the sector service-wise, with flight delays and cancellations seeming to get worse as the year went on, according to figures from the Airline Customer Advocate (ACA).

Mandatory compensation for cancelled or delayed flights

The paper makes a number of recommendations, including allowing more foreign airlines to fly domestic routes in order to put downward pressure on airfares.

But it’s a call to implement a mandatory compensation system for impacted travellers that seems to have ruffled Qantas’s feathers the most.

The government recommends strengthening the powers of the ACA and “working with industry to introduce ‘fixed payout’ type insurance products that provide more certain compensation arrangements”. 

Compensation schemes for cancelled or delayed flights are already in place in other jurisdictions such as the European Union. The paper also floats the idea of creating an independent aviation ombudsman to manage compensation claims.

“The Australian government is also seeking to understand whether options pursued in other jurisdictions – such as a Customer Rights Charter or a stronger ombudsman model – would deliver benefits to Australia’s aviation sector,” the paper says.

Qantas disagrees

Perhaps unsurprisingly, Australia’s largest airline is not a fan of the mandatory compensation proposal.

In its submission to the green paper, it argues that the current state of increased delays and cancellations is a temporary effect of the ‘post-COVID restart’.

“Australia is far from alone in experiencing these systemic issues,” Qantas says.

“Airlines around the world have faced increased delays and cancellations.”

Qantas says any move to introduce a mandatory compensation scheme would have unintended negative consequences and would not tackle the root causes of the reliability problems.

“The Qantas Group considers that the introduction of mandatory compensation would be a backwards step that will do nothing to reduce delays and cancellations, will increase confusion and complaints and materially increase costs, ultimately leading to higher fares and potentially compromising the viability of marginal routes.”

The company argues that forcing airlines to act as insurers against cancellations or delays is unfair, especially when many are due to circumstances outside airlines’ control, such as weather or a global pandemic.

“Airlines cannot be the insurer of a last resort,” the submission reads.

“In an industry that must always put safety before schedule, a compensation regime delivers little but increased costs.”

Have you had a flight cancelled or delayed this year? Did you receive any compensation? Let us know in the comments section below.

Also read: New rule for Qantas customers

Written by Brad Lockyer

Brad has deep knowledge of retirement income, including Age Pension and other government entitlements, as well as health, money and lifestyle issues facing older Australians. Keen interests in current affairs, politics, sport and entertainment. Digital media professional with more than 10 years experience in the industry.

4 Comments

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  1. Qantas has been taking advantage of Australian customers for far too long, it is rubbish to suggest that customers DO NOT require compentation as European and USA customers already receive today. We are NOT a Third World Country and Qantas customers deserve much better than the paltry service that has been provided.

  2. If your flight is canceled due to weather or aircraft problems, then there is no compensation but if it is canceled for any other reason then yes, return the cost of the seat or re-book the flight with another airline.

  3. I just had an experience with Bonza, booked a return flight. the first flight was leaving 40 minutes late, problem wasn’t Bonza but the airport – false security alarm paralized all movements. The return trip was cancelled an hour before boarding as the same airport (Cairns) closed due to flooding. Bonza promised to refund the airfare within 10 days. That’s the service I would expect from Qantas or any other airline. If the plane doesn’t fly there is no expense Increased airfares due to additional demand in the days following more than make up for any loss. I had to rebook at more than three times the original price at short notice. This is now common practice by all Australian airlines.

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