Consumer group Choice has called for an overhaul of how Australian airlines deal with customers after it found the industry guilty of “systemic breaches” of Australian Consumer Law.

“From repeatedly informing travellers they do not have a right to a refund to charging sky-high cancellation fees, our domestic airlines have been flying below the radar when it comes to consumer protection,” Choice director of campaigns, communications and content Matt Levey said.

Choice called on the Australian Competition and Consumer Commission (ACCC) to launch action against the airlines, with the government watchdog confirming it will look into the claims.

“The ACCC will review Choice’s report on the airline industry for potential breaches of consumer guarantees or unfair contract terms under the Australian Consumer Law,” ACCC chairman Rod Sims said in a statement.

No refund policy

Under Australian Consumer Law (ACL), everyone has the right to a refund, but three out of four domestic airlines defy this with a blanket ‘no refund’ policy, Choice said.

The Qantas Red e-deal fare makes specific claims in the terms and conditions when progressing through the booking screen, stating that “the original ticket value is non-refundable and remains non-refundable at all times”.

Jetstar’s Conditions of Carriage acknowledge the application of other laws that may apply “for the benefit of consumers” and references the ACL, but under the same conditions the airline specifically indicates some fare types are “non-refundable”.

Qantas’ Red e-deal “non-refundable” claim. Photo: Choice

Virgin’s Getaway fare says refunds are “not permitted” and does not reference the consumer’s right to a refund under the ACL.

Virgin’s Getaway fare refund policy. Photo: Choice

Choice said Tigerair had the least confusing model in the Australian domestic.

“Businesses across the country are banned from making blanket ‘no refund’ claims, but the airlines do so blatantly when selling tickets,” Mr Levey said.

“Under the Australian Consumer Law, you have a right to a refund no matter how many times an airline lands you with a ‘no refund’ message as you make your way through an online checkout.”

Excessive cancellation fees

All four major airlines charge some form of fee for a full cancellation of a booking, with some exceeding 100 per cent of the original ticket.

The most expensive cancellation fees were applied to Qantas’ $400 international sale fare and Virgin’s $550 saver fare to Europe via the Middle East.

Virgin customers receive the remainder of the ticket value in their ‘Travel Bank’, instead of in the form of original payment.

According to the ACCC, not more than 10 per cent is an appropriate deposit fee and that excessive cancellation or administrative fees may be regarded as unfair contract terms.

Void tickets

‘No show’ clauses result in passengers’ tickets for subsequent legs voided. Photo: Getty

Passengers who miss the first or subsequent legs of a flight are having multiple tickets voided, despite having paid for their onward flights.

These “no-show” clauses are banned in other countries such as Germany and Spain.

Each Australian domestic airline has this clause and will cancel subsequent trips, and does not refund the passenger after the missed flight, Choice says.

Virgin describes this clause as “tickets used in coupon sequence” in Conditions of Carriage.

“You must use the Flight Coupons or Electronic Coupons in your Ticket in the sequence they appear on your Ticket, and you must commence your journey with the first coupon. If you do not, your Ticket may be invalid, and we reserve the right to refuse to carry you, and to cancel the Ticket,” it states.

Among the other breaches Choice highlighted are:

• Zero responsibility: airlines are dodging responsibility to deliver flights on time despite charging premium prices for peak flight times.
• No access to credit: Passengers who are given credit on future flights are not being given access to the credit, Choice says.
• No accountability: Customers are not being offered any compensation for having their flights cancelled or delayed.