Drafting of consumer-driven Downgrade Redress policy - please contribute

[timster]

i disagree the refund should be 100%. We already have that under current consumer protection laws. But then you don't also get to fly. It right that the airline still gets paid *something* if they transport you.

They usually get much more than 'something'. In the over-booking situation, they got to sell your seat to someone they had no right to sell it to. Their gamble failed. They received the price of two business class seats, when they only had one available. They are already profiting from the situation, and an ongoing business strategy that demonstrably and knowingly puts the right of passengers to receive the service they paid for in regular jeopardy, in the pursuit of a business gamble. If they are to be allowed to make that gamble with passengers' rights, they must be required to compensate fully when it fails and a passenger is effectively forced to accept a service they never intended to purchase.

The downgraded passenger is over a barrel in often having no choice but to fly. So it's not a normal consumer-company transaction; it's unique, and so may require unique terms. One might frame it similarly to situations where special protections are afforded to those who are particularly vulnerable to exploitation. The 100% refund (or more in some cases I suggested), simply claws back some of the profit obtained by questionable means and gives it back to the 'victim'.

I think the policy needs to be firm in rejecting the notion that a downgraded class of travel is in any way fulfilling the terms of the original contract between the airline and the passenger. The current practice redefines that contract such that a consumer can be effectively charged for a service they did not intend to 'purchase'. Are there any other precedents in consumer law where that can occur legally ?

 

[Franky]

They usually get much more than 'something'. In the over-booking situation, they got to sell your seat to someone they had no right to sell it to. Their gamble failed. They received the price of two business class seats, when they only had one available. They are already profiting from the situation, and an ongoing business strategy that demonstrably and knowingly puts the right of passengers to receive the service they paid for in regular jeopardy, in the pursuit of a business gamble. If they are to be allowed to make that gamble with passengers' rights, they must be required to compensate fully when it fails and a passenger is effectively forced to accept a service they never intended to purchase.

The downgraded passenger is over a barrel in often having no choice but to fly. So it's not a normal consumer-company transaction; it's unique, and so may require unique terms. One might frame it similarly to situations where special protections are afforded to those who are particularly vulnerable to exploitation. The 100% refund (or more in some cases I suggested), simply claws back some of the profit obtained by questionable means and gives it back to the 'victim'.

I think the policy needs to be firm in rejecting the notion that a downgraded class of travel is in any way fulfilling the terms of the original contract between the airline and the passenger. The current practice redefines that contract such that a consumer can be effectively charged for a service they did not intend to 'purchase'. Are there any other precedents in consumer law where that can occur legally ?

Well put...

 

[MEL_Traveller]

They usually get much more than 'something'. In the over-booking situation, they got to sell your seat to someone they had no right to sell it to. Their gamble failed. They received the price of two business class seats, when they only had one available. They are already profiting from the situation, and an ongoing business strategy that demonstrably and knowingly puts the right of passengers to receive the service they paid for in regular jeopardy, in the pursuit of a business gamble. If they are to be allowed to make that gamble with passengers' rights, they must be required to compensate fully when it fails and a passenger is effectively forced to accept a service they never intended to purchase.

The downgraded passenger is over a barrel in often having no choice but to fly. So it's not a normal consumer-company transaction; it's unique, and so may require unique terms. One might frame it similarly to situations where special protections are afforded to those who are particularly vulnerable to exploitation. The 100% refund (or more in some cases I suggested), simply claws back some of the profit obtained by questionable means and gives it back to the 'victim'.

I think the policy needs to be firm in rejecting the notion that a downgraded class of travel is in any way fulfilling the terms of the original contract between the airline and the passenger. The current practice redefines that contract such that a consumer can be effectively charged for a service they did not intend to 'purchase'. Are there any other precedents in consumer law where that can occur legally ?

Good points. But what we need is for the ACCC, politicians and public to take this seriously.

Some of the emotions here are not likely to garner that support.

The EU has had there scheme for some time. It arguably works well save for some airlines being reluctant to pay up. No one seems to be raising the extraordinary issues such as being 'foced to fly' in a lower class. They either take the downgrade, wait till the next flight, or get offered another airline. All of which pays handsomely, or puts them in a 'no loss' situation (in the event they fly another airline in the correct class and arrive more or less per their original schedule).

Under the current scheme I agree that airlines profit. But if there was a mandatory 75%, or lowest fare, the airlines wouldn't, and the downgraded passenger still needs to pay for their passage - it's their choice to take the downgrade.

 

[timster]

Good points. But what we need is for the ACCC, politicians and public to take this seriously.

Some of the emotions here are not likely to garner that support.

The EU has had there scheme for some time. It arguably works well save for some airlines being reluctant to pay up. No one seems to be raising the extraordinary issues such as being 'foced to fly' in a lower class. They either take the downgrade, wait till the next flight, or get offered another airline. All of which pays handsomely, or puts them in a 'no loss' situation (in the event they fly another airline in the correct class and arrive more or less per their original schedule).

Under the current scheme I agree that airlines profit. But if there was a mandatory 75%, or lowest fare, the airlines wouldn't, and the downgraded passenger still needs to pay for their passage - it's their choice to take the downgrade.

Fair point re emotions. I just read some of the Emily's Parents thread again. That gets my back up every time. But I do think it's important to challenge some of the specious notions underpining airlines' current behaviours in the strongest terms. We also need to be aware that the people considering any policy submission are not as well across what goes on in the downgrade world. There is an 'AFF bubble'.

Re the relative acceptance of downgrades under EU policy by pax, that presumably largely reflects the fact that they are rarely facing 16 hours (possibly rising to ~20 hours soon) crammed into an economy seat, when they've paid thousands of dollars for the opposite - that alone makes a case for different local policy ... the downgrade burden is, on average, greater. They're also all shorter than me in the EU.

 

[MEL_Traveller]

Re the relative acceptance of downgrades under EU policy by pax, that presumably largely reflects the fact that they are rarely facing 16 hours (possibly rising to ~20 hours soon) crammed into an economy seat.

Good point. So perhaps introduce an ultra-long-band for delays... 8+ hours (or 10 or whatever) gets $2000 compensation.

So you either fly economy and get 75% of the fare refunded, accept another airline, or you wait for the VA/QF flight the next day and get your original cabin + $2000.

Perhaps too this is where the 75% doesn't work so well for flights ex Australia - a $11K J class fare SYD-LAX, or $5500 each way would only net a refund of $4125. What the pax ends up paying is still potentially way more than the economy fare. So perhaps the 'lowest fare paid by any passenger' model would be better.

 

[timster]

Current Qantas Involuntary Downgrade policy ... distinguished more by its omissions than its inclusions ...

Involuntary Downgrade

These guidelines outline the notification, rebooking, ticket reissue and fare adjustment process for you to follow when your customer has been affected by an operational change resulting in an involuntary downgrade of the cabin.

www.qantas.com

Previous detailed Fare Refund Table PDF (circa 2012 forward) posted to AFF in the past from the above site ...

FareRefundTableEffective17Sep12

MediaFire is a simple to use free service that lets you put all your photos, documents, music, and video in a single place so you can access them anywhere and share them everywhere.

www.mediafire.com

 

[PineappleSkip]

Laudable initiative, and I’d be happy to support where I can.

However, starting with drafting a text struck me as putting a cart before an unspecified horse. Not sure if this is being proposed as an official policy or law (EU 261/2004 is a regulation), a code of conduct, a model policy for airlines to consider, or something else. I’d start with scoping the problem to be tackled, assessing the political economy and what is feasible, and figuring what AFF could best do.

General agreement that consumer options in situations like involuntary downgrading are inadequate, and the suggestion that Governments should do something to fix this.

Once upon a time Australia was a leader in regulatory process, and it still applies many best practices. There has been a standard Fed Govt guide to regulation for many years, which has a useful step by step process for fixing public interest problems. It sets out a general problem resolution process, which has the following broad steps at p. 4.

What is the problem you are trying to solve?
Why is government action needed?
What policy options are you considering?
What is the likely net benefit of each option?
Who will you consult about these options and how will you consult them?
What is the best option from those you have considered?
How will you implement and evaluate your chosen option?


Cheers skip

 

[TheInsider]

Current Qantas Involuntary Downgrade policy ... distinguished more by its omissions than its inclusions ...

Involuntary Downgrade

These guidelines outline the notification, rebooking, ticket reissue and fare adjustment process for you to follow when your customer has been affected by an operational change resulting in an involuntary downgrade of the cabin.

www.qantas.com

Previous detailed Fare Refund Table PDF (circa 2012 forward) posted to AFF in the past from the above site ...

FareRefundTableEffective17Sep12

MediaFire is a simple to use free service that lets you put all your photos, documents, music, and video in a single place so you can access them anywhere and share them everywhere.

www.mediafire.com

This table is not the offered 'compensation' to the pasengers, this is the fare component. Compensation is in addition to that.

Also for that other link, that is produced for Travel Agents before travel has commenced and not on the day of departure where airports handle the 'compensation' part of it all.

 

[MEL_Traveller]

I think you'd want it as law. At least that would be the starting point. The airlines would want to negotiate it something less.

Luckily I think some of the other questions will already be answered by previous ACCC investigations... including the potential need for government action (this could be considered an extension to ongoing activity rather than something 'brand new').

I suspect the consultation will be meaningless. The airlines will roll out the usual counter-arguments...
(a) safety is the #1 priority and all safety related delays or cancellations should be excluded, including any knock-on delays or cancellations
(b) this will put pressure on fares, disadvantaging the Australian population
(c) if fares are kept low, this could mean efficiencies have to be found in other areas (jobs, or cutting flights to regional areas)
(d) the administrative burden will be too great with hundreds of claims every time a flight is delayed
(e) smaller regional operators may be unable to cover the costs of the scheme

Bottom line - if there are votes to be won, the parties may consider it. But there'll be significant lobbying by the airlines. Maybe even some deal done by the airlines and the unions to block it

 

[MEL_Traveller]

....and not on the day of departure where airports handle the 'compensation' part of it all.

IIRC this doesn't seem to have been the case? Everything we've read on AFF suggests the airport simply says 'you'll get compensation' but never discusses the amounts or details. The the airlines play hardball once travel has been completed.

The only area with certainty are flights ex EU?