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Hi all, thanks for the lively discussion and advice.
I spoke to a supervisor at the service desk in Melbourne. It turns out they had an aircraft change and had fewer seats available. As a result at least 10 people connecting to QF23 from Melbourne got bumped because there was this Jetstar flight.
A lot of the frustration would’ve been solved with clearer communication up front. I’m now on board the JQ flight surrounded by screaming children.
I was told to pursue some sort of recompense via Qantas customer care. Will see what they come up with.
IMHO, Qantas should be able to tell you upfront (ideally in writing) what compensation will be provided for the downgrade to a budget airline and the inconvenience, as well as arriving 3.5 hours late at the destination.
I suspect what will happen, instead, is that Qantas Customer Care will respond to you in 1-2 months to say that as an equivalent alternative flight was provided and "accepted", no compensation is owed. They might throw in 2,500 points as a "gesture of goodwill", but I don't think that's enough.
We really need mandated compensation in Australia for cases where airlines bump passengers like this for reasons within their control. If you were flying in Europe, the airline may owe you €300-600 in this scenario.