How Australia’s new air passenger rights laws miss the mark

The Australian government has finally moved to address the power imbalance between airlines and their passengers.

After years of travellers being left stranded with vouchers and an apology, Minister for Infrastructure and Transport Catherine King this month introduced a package of bills to Parliament.

At the heart of the proposal is a shift in how airlines must handle significant disruptions.

Under the new Aviation Consumer Protection Charter, airlines will be required to provide cash refunds for flights that are cancelled or “significantly delayed”.

That significant delay is described as at least three hours for a domestic flight, and at least six hours for international services.

At those points, the airline must offer all passengers a refund unless the issues were beyond its control, such as weather or air traffic control shortages.

Additionally, the laws aim to standardise “care and assistance”, which is currently left up to the airline.

This includes providing meals, communications, and hotel accommodation when passengers are stuck overnight through no fault of their own.

However, it can easily be argued that these definitions of a significant delay are far too lenient.

On the most popular domestic routes – along the eastern seaboard of Brisbane, Sydney, Canberra and Melbourne, along with Melbourne-Adelaide – there are so many flights each day that a three-hour delay simply means shuffling passengers onto the next flight or the one after that, without the airline triggering any penalty.

No “pay on delay”

These new traveller protection laws also fail to match the "pay on delay" models adopted in many countries including the UK, Canada and across Europe.

Under the EU261 and UK261 laws, delays of more than three hours often carries an automatic obligation for a compensation payment of more than $1,000, depending on the length of the flight.

Read: How to claim EU261 or UK261 flight compensation

The Australian opposition has pushed for a similar scheme, arguing that only a direct financial penalty truly incentivises an airline to run on time.

The Labor government has explicitly rejected this, settling for a focus on “making the passenger whole” by ensuring they are not out of pocket for food or hotels, but not a heftier cash payment for the overall inconvenience.

Enforcing the new Aviation Passenger Charter

To oversee these changes, the government is establishing the Aviation Consumer Ombuds.

This body will have the power to investigate complaints and, importantly, the authority to direct airlines to provide remedies.

If a carrier fails to comply with the new standards, the government can issue fines of up to $2 million.

This is a significant escalation from the current Airline Customer Advocate, which has long been criticised as a "toothless" industry-funded body.

The airline pushback

Australia’s airline industry appears to have successfully argued that cash compensation rules could drive up costs and, ultimately, airfares.

Even so, industry body Airlines for Australia and New Zealand (A4ANZ) says the proposed Aviation Industry Ombudsperson will add layers of bureaucracy, and remains in favour of strengthening existing consumer law.

“Quite simply, more bureaucracy means more cost,” says A4ANZ Chair Professor Graeme Samuel.

“As we have advised Government, the proposal to introduce additional layers of regulation – including the creation of an entirely new regulatory agency – adds complexity, duplication and cost to a system already overseen by well-established bodies such as the ACCC.”

In addition, airlines have warned that the reforms could prove "unworkable" and may lead to higher ticket prices because the cost of compliance, from mandatory hotel stays to the administration of the ombudsperson scheme, will eventually be passed on to the consumer.

A step forward, or a missed opportunity?

For the Australian traveller, these bills represent progress, but they are far from a radical overhaul.

The move toward cash refunds and standardised care is a win for transparency and removes the guesswork from a gate-side negotiation.

But the absence of mandatory compensation puts Australia at odds with the broader consumer-favouring laws of much of the Northern Hemisphere.

Even so, the success of this legislation will depend entirely on how the new ombudsperson operates.

If the office is well-resourced and aggressive in its enforcement, airlines will likely lift their game.

If it becomes another bureaucratic clearing house for complaints, the flying public may find that little has changed when the departure board is flooded with delays and cancellations.

Also read: Compensation for delayed, cancelled Qantas flights from London