Australia plans compensation scheme for flight delays, cancellations

Aussies may soon get refunds and care for delayed or cancelled flights. Photo / Getty Images

Passengers who experience flight delays and cancellations could be entitled to compensation such as refunds and prompt rebookings under a proposed Australia-first aviation consumer protection scheme.

This follows criticism that Labor’s draft charter of aviation rights lacked clarity on when customers were entitled to a refund or other compensation and specific guidance for claim times and compensation for damaged, delayed or lost baggage.

Consumer advocacy group Choice also noted a fundamental flaw, questioning which regulator would be in charge of enforcing the charter.

Transport Minister Catherine King will announce a four-week consultation period for the scheme on Monday, with the Government aiming to pass legislation by the end of 2025.

The scheme, which will include minimum levels of assistance, information requirements when booking a flight, and rules around when a consumer will be entitled to a refund or other compensation, will then be rolled out from next year.

King said the protection scheme would clarify obligations for airlines and airports.

“We’ve heard the frustration Australian aviation passengers feel when dealing with airlines and airports,” she said.

“When things go wrong, it can be hard to know what passengers can expect from airlines and airports, because the approach is different at every airport and with each airline.

“This includes information requirements when you book a flight and check-in, how you should be communicated with and minimum levels of assistance when a flight is disrupted, and how airlines and airports should manage complaints.”

Similar consumer protection schemes operate in the US and the European Union where passengers are entitled to compensation of up to €600 ($1072) on flight delays of up to three hours or more, unless the issue is caused by extraordinary circumstances like a natural disaster or civil unrest.

Passengers are also entitled to basic care like meals, and accommodation if the delay is overnight.

A recent report by the Australian Competition and Consumer Commission also found Qantas’ cancellation rate (3.2%) was double the rate of its main competitor Virgin (1.6%), however Qantas’ budget sister airline Jetstar had a cancellation rate of 1.1%.

In October 2024 Qantas was also fined up to $100m in penalties after it was found to have sold more than 82,000 tickets for ‘ghost flights’ the airline was intending to cancel.

The sales occurred between May 2022 to May 2024 following the post-Covid travel boom.

The consumer watchdog also found Qantas had delayed notifying passengers of the flight cancellations, and took an average of 11 days, and in some cases up to 67 days to notify passengers of cancellations.

This was on top of the $20m payment it agreed to pay to passengers who had purchased tickets on flights Qantas had already cancelled.