The Australian Competition & Consumer Commission (ACCC) has forced Qantas to contact customers issued with flight credits to inform them of their entitlement to a refund. This includes customers that opted to cancel their booking for a voucher before Qantas cancelled their flight.
The ACCC alleges that Qantas failed to adequately inform customers of their right to a refund in communications between 17 March and 31 May 2020. Qantas also pressured some customers into cancelling their bookings for a credit themselves, so they would lose their right to a refund when Qantas later cancelled their flights.
It appears Qantas is now offering refunds for credits issued for flights originally scheduled to depart between 17 March and 31 May. But some customers have been offered incentives such as extra value on their vouchers, extended flight credit validity and even bonus status credits if they opt to retain their flight credit rather than taking the refund. If you think you’re entitled to a refund, it’s worth calling Qantas to ask.
In fairness to Qantas, most airlines globally have avoided using the word “refund” in communications with customers about flights cancelled due to COVID-19. But that doesn’t mean customers are not legally entitled to one.
According to the section 9.2 of the Qantas Conditions of Carriage, passengers are entitled to a refund for flights cancelled due to events beyond the airline’s control if alternative flights offered are not acceptable to the customer.
Following weeks of pressure from the ACCC, Qantas is now sending emails to “remind” customers of their right to a refund if Qantas cancelled their flight. But the ACCC says that even Qantas’ most recent communication is “not particularly clear”.
“From our perspective, from the outset, Qantas did not communicate clearly with customers about their rights and, in a large number of cases, simply omitted they were entitled to a refund,” ACCC Chair Rod Sims said.
“If any customer in this situation is unhappy with receiving a credit, or no longer wants one due to continuing uncertainty about when flights will resume, we strongly encourage them to contact Qantas and seek a refund,” Sims said.
In its defence, Qantas told news.com.au in a statement that it hoped the ACCC wasn’t inferring it had done the wrong thing by customers “particularly given the efforts we have made to manage an exceptional level of upheaval”.
“We’ve written again to a group of customers in the window of time that the ACCC is concerned about to make sure they know what alternatives are available to them,” Qantas said.
A waiting game…
Australian Frequent Flyer informed Qantas and Jetstar customers as far back as 23 March that they are entitled to a full refund for flights cancelled by the airline.
In April, Qantas pressured customers booked to fly before 31 July 2020 to request a credit voucher by the end of the month. Qantas warned customers that no longer wished to travel that they would have to pay cancellation fees if they didn’t request a flight credit by 30 April. As we said at the time, this was somewhat misleading because Qantas was still selling flights for June and July that would later be cancelled. Qantas was likely hoping that customers due to travel in June or July would request a voucher before Qantas cancelled their flights in early May.
In cases where Qantas initiates the cancellation, customers are still being issued automatically with flight credits. But customers can request a full refund instead by contacting Qantas. As a result, if your flight is not yet cancelled, your best option is to simply wait for the airline to do it.
Join the discussion on the Australian Frequent Flyer forum: Qantas Revenue booking cancellations (under covid19)
The ACCC also could have done more
The ACCC is treating this latest move by Qantas as a victory, and it certainly is an improvement. But, in our view, the consumer watchdog is also not blameless.
“We want to ensure that customers are aware that when Qantas suspends or cancels flights due to travel restrictions and fails to provide them with an acceptable alternative flight, they are entitled to a refund,” ACCC Chair Rod Sims is now saying.
Yet back in March, the ACCC issued guidance that warned government travel restrictions could impact consumers’ rights. “However, if the event, flight or travel service is cancelled due to government restrictions, consumer rights under the consumer guarantees may be impacted,” the ACCC website said at the time.
Many travel businesses, including Virgin Australia and Flight Centre, used this ACCC guidance as justification not to provide refunds – even if this contravened Australian Consumer Law or the business’ own refund policy. The ACCC did later warn businesses that they cannot retrospectively change their refund policies, and Flight Centre did eventually reverse its controversial cancellation fee policy.
But many thousands of Virgin Australia customers missed out on refunds that they were legally entitled to. Virgin has now paused issuing refunds anyway due to entering voluntary administration on 21 April. But even a month before it was in voluntary administration, it was refusing to issue refunds for flights cancelled by the airline. At the time, Virgin specifically cited the ACCC guidance as justification for its policy, which was likely illegal.
Australian Frequent Flyer contacted the ACCC about Virgin’s problematic refund policy in early April. They declined to comment publicly and did not take action against Virgin Australia.
The ACCC is also monitoring domestic airfares
In other news, the federal government last Friday asked the ACCC to closely monitor domestic airfares, capacity, aviation costs and airline profits for the next three years. The government is worried that airfares could increase over time and that airlines could engage in anti-competitive behaviour, particularly in the context of the current situation with Virgin Australia.
For example, Jetstar launched a sale offering $19 fares on Friday. This is obviously a great deal for customers that managed to score one of the cheap airfares, which sold out within 4 hours. But regularly offering below-cost airfares could have the effect of pushing competing airlines out of the market – leading to higher fares in the long term.
Regional Express (Rex) has been complaining a lot lately that Qantas may be engaging in anti-competitive behaviour against them – although that’s nothing particularly new. It whinged back in February that Qantas had pushed them out of markets like Ballina and Kangaroo Island, and was trying to do the same in Orange.
Then, following Qantas’ announcement two weeks ago that it would triple domestic capacity in July, Rex announced it would match Qantas in resuming daily services – but only begrudgingly, and only on routes where it competes directly with Qantas.
“It is with great reluctance that we are adding so much additional flying so soon that doesn’t match demand. Today we are still seeing a 90% drop in passenger numbers and we would normally gradually increase our flying schedule in tandem with the growth in passenger numbers so as to minimise losses. In ports where Rex is the sole provider, we have no plans to increase capacity significantly in the immediate future,” Rex Chief Operating Officer Neville Howell said.
“However, QantasLink’s aggressive new published schedule for July, announced with great fanfare yesterday, compels us to match this move so as not to be squeezed out of the market.”
