When you’ve booked a Business Class ticket, it’s extremely frustrating to turn up to the airport and find out you’ve been involuntarily downgraded to Economy Class. But, if you’re flying with Qantas, that’s only the beginning of the nightmare.
Australian Frequent Flyer has been very concerned to learn of Qantas not providing adequate compensation to passengers for involuntary downgrades. So, we did some investigating to find out what Qantas’ official downgrade compensation policy is. As it turns out, the policy falls well short – which is probably why it’s hidden from public view.
Involuntary downgrades
In a recent case, AFF member QPRsludger and his wife had redeemed points for Qantas Business Class seats many months in advance from Perth to Los Angeles, via Brisbane. Shortly before boarding the flight to Los Angeles in Brisbane, Qantas staff told this member that his wife would be downgraded to Premium Economy for the 13-hour overnight flight as Business was full. In a “take it or leave it” offer, Qantas promised a mere US$600 ($872) and a small refund of the difference in points as compensation. On a one-way Qantas ticket from Brisbane to Los Angeles, the fare difference between Business and Premium Economy is $5,756.
Given the choice, QPRsludger says they would never have accepted the downgrade. You can read more about this case on the Australian Frequent Flyer forum: QANTAS Treatment of Frequent Flyer Bookings
Sadly, this member is not alone. In the past, Qantas has offered no refund or compensation at all after downgrading a paying passenger from Business to Economy on a connecting domestic flight. Separately, there are also many stories of Qantas downgrading its customers onto low-cost Jetstar flights without providing any compensation. And some long-time readers may remember this infamous Qantas downgrade debacle involving pensioners flying out of New York in 2014.
Qantas has also been caught out offering just 10,000 points as compensation for a downgrade from First Class to Business Class on the Dallas/Fort Worth-Sydney route. In this instance, the affected AFF member took Qantas to the Airline Customer Advocate and won.
Being downgraded is hugely inconvenient for passengers. Many Business Class passengers have specifically chosen to pay more for the extra comfort due to health reasons or because they are required to go straight to work at their destination. So, they should be compensated adequately for the enormous inconvenience of being downgraded. Yet, Qantas’ compensation policy doesn’t even seem to cover the true difference between the airfares paid.
Qantas downgrade compensation policy for domestic flights
A Qantas spokesperson told us that, in cases of involuntary downgrades on domestic flights, Qantas would refund the difference between the Business fare and the most expensive, flexible Economy airfare available in the new class of travel.
Frankly, this is a woefully inadequate policy. If a passenger wanted to fly Economy, they would have paid much less for their Economy ticket at the time of booking than the fully-flexible “Y” class fare. We understand that involuntary downgrades are sometimes necessary, for example due to overbooking or a last-minute aircraft change. But if an airline needs to downgrade a passenger, they should be paying significant compensation rather than trying to rip them off further.
As an example, if you wanted to book a Qantas flight from Sydney to Melbourne next month, you could expect to pay around $190 for a Red e-Deal Economy ticket or $700 for a Business ticket. If you booked Business and were subsequently downgraded to Economy, it would therefore be reasonable to expect at least $510 as compensation, i.e. the difference between the two airfares at the time of booking. In fact, this is exactly Virgin Australia’s guest compensation policy. But Qantas’ fully-flexible Economy fare price on the Sydney-Melbourne route is $880. So, in this example, you would be lucky to receive anything as compensation.
Qantas downgrade compensation policy for international flights
The Qantas spokesperson told Australian Frequent Flyer that a different policy applies to international flights.
“Internationally customers that are downgraded receive a 50% refund of the affected coupon value of their ticket with a 75% refund for those whose bookings were made ex Europe.”
The 75% refund for customers travelling from Europe is in line with the European Union’s mandatory compensation for passengers affected by airline delays, cancellations, overbooking and downgrades. Under EU261 regulations, airlines must pay passengers 75% of the cost of the ticket as compensation within 7 days if they are downgraded on a long-haul flight. This is a legal requirement.
Australia does not have any such laws or regulations, so Qantas will only give a 50% refund. This is somewhat better than Qantas’ domestic compensation policy, but still may not be sufficient in many cases. For example, it costs $783 for a return Economy ticket from Sydney to Bangkok, while Business class costs $3,963 return. If you were to be downgraded from Business to Economy on both flights, the 50% refund of the Business fare would only equate to $1,981.50. This means you’ll still have paid around $1,200 more than you may have otherwise paid to book an Economy ticket in the first place!
The calculation could get tricky, though, if just one sector of a larger multi-segment booking is downgraded.
We would note that the Canadian government has recently introduced Air Passenger Protections which apply to all flights to and from Canada, including Qantas flights to Vancouver.
What downgrade compensation is offered on frequent flyer award bookings?
We asked Qantas whether there is any difference in how compensation is calculated for passengers on commercial tickets vs frequent flyer redemption bookings. Qantas did not answer this.
Information not available to the travelling public
Qantas’ downgrade compensation is no longer available to the public. We find this concerning as we feel that the travelling public has a right to know what to expect. Qantas did not answer our questions as to why this is the case.
The Qantas spokesperson told us, “When an alternative flight in the selected cabin can’t be booked within a reasonable time frame, customers are entitled to a fare or points difference refund, this is calculated pending route and flight duration”.
A travel agent who spoke to Australian Frequent Flyer told us that Qantas was unwilling to provide them with any information about how downgrade compensation payments are calculated. They were told that it’s calculated on a case-by-case basis by the airline’s finance department. However, this travel agent was told that they could pay a $20 fee for a “refund calculation service”. Yes, seriously.
What to do if Qantas tries to downgrade you
If any airline tries to downgrade you from your originally-booked class of travel, you are not obligated to accept their first offer. If you must travel on your booked flight, try to negotiate a higher compensation payment before accepting the downgrade. Or, if you are willing to travel on another flight, ask to be re-accommodated in your booked class of travel on a different flight (even if this means flying on a different airline). Once you accept the downgrade and board the flight, it is very difficult to negotiate better compensation later.
Qantas’ Conditions of Carriage say that you have a choice between accepting the airline’s offer of compensation or taking a different flight if they have to downgrade you. Section 4.7 of the Qantas Conditions of Carriage states:
If we need to ask you to downgrade for any reason, we will at your option:
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provide you with an appropriate refund of the difference in fares (or an appropriate credit of Qantas Points in the event that you are travelling on a Qantas Frequent Flyer Award), or
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accommodate you on a reasonable alternative available flight on our services.
Under section 13.1 of the Qantas Conditions of Carriage, you are also entitled to a refund if you choose not to travel at all, or to cancel and rebook on a different airline.
If you do end up travelling on a different flight or class of travel to what you had booked, don’t forget to request an original routing credit so that you at least earn the points and status credits you’re entitled to.
