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Could travel frustrations pay to Australians increase air rates?

Could travel frustrations pay to Australians increase air rates?

Sakege09 mins

Forcing Australian airlines to compensate for travelers due to lost or delayed flights would increase reliability, but would reach a cost for passengers, experts say.
A payment bill now before Parliament would make Qantas, Virgin Australian and other operators responsible to passengers.
Australia does not impose sanctions on airlines by canceled or delayed flights, with impacted passengers that depend on individual airline policies.
The Senator of the National Party Bridget McKenzie asked a Qantas executive if a mandatory compensation scheme would increase the cost of flying during a Senate Committee hearing on Monday.

The National CEO of Qantas, Markus Svensson, said that mandatory payment schemes increase costs and do not lead to less cancellations or delays.

“These schemes do not offer better results for the consumer in terms of reduced delays or cancellations, and increase the cost of trips,” he said.
However, experts say that a minimum payment scheme for passengers in Australia would probably lead to more flights in time.
Adam Glezer, from the website of the consumption champion, was invited to speak during the audience on Monday, where he supported a mandatory compensation scheme.
He told SBS News on Tuesday: “A compensation scheme would improve reliability in these areas due to the deterrent factor that would be in place.”
The European Union presented the EU261 mandatory compensation law in 2004, that the managing director of Aviation Consultants Aviation Projects, Keith Tonkin, said that encouraged airlines are more reliable.

The regulation grants the airline passengers the right to claim compensation for delays and flight cancellations, except in extraordinary circumstances.

Would a compensation scheme improve reliability?

A table qualifying the reliability of Australian airlines

Qantas was considered the most reliable of Australia’s main operators last year.

Tonkin said that, on average, operators under the regulations of the EU261 reached 5 percent more often than in Australia, with arrivals in time they averaged around 81 percent.

The global data collected by the Aviation Analysis firm Cirium found that the three main airlines in Australia, -The registered time performance rates of 73.9 percent, 73.4 percent and 72.7 percent respectively in 2024.
“Airlines will generally try to meet the needs of their customers and normally do not cancel a flight if they had income passengers on the flight,” he told SBS News.

“The compensation scheme in Europe has encouraged airlines to arrive more reliable than before.”

Would the airlines pass the cost for flyers?

Tonkin said that a delay payment scheme would ultimately increase the cost of aerial rates.
Airhelp data, a German -based company that helps people with flight compensation claims estimated that flights in the Eurozone and the United Kingdom were around $ US1.20 ($ 1.89) to 60 cents from the USA. (95 cents) more expensive for passengers due to the EU261 scheme.
The highest flight cost due to mandatory compensation can lead to the airlines to charge customers a couple of Australian dollars in the EU.

But Tonkin said the increase could be greater in Australia due to our aviation duo.

A bar chart that estimates the passenger cost of a mandatory compensation scheme for the aviation sector.

Fountain: SBS news

“In Australia, we basically have two airlines that fly around 95 percent of the traveling public in programmed services, Qantas, Jetstar and then Virgin. Therefore, they are not as sensitive to the loyalty of the passengers as the Europeans say,” he said.

“They have a little more pricing power than in Europe. The details that I have seen that it was reported were that there was a small jump in the air rates of one or two dollars due to the scheme. There is potential for that price to be a little higher in Australia only because of the lack of competition.”

‘Consisting of all areas’

The consumer lawyer Glezer said: “A compensation scheme such as the one in the EU and the United Kingdom is desperately necessary in Australia.”
“Any compensation scheme would have to be consistent in all areas for all airlines in the interest of equity and avoid confusion.”
Glezer said that the inconvenience caused to passengers of decisions within the control of an airline must be compensated.
“When airlines cancel flights that are under their control or when flights are significantly delayed, it is an inconvenience for passengers. It makes people lose important events such as weddings, funerals, work meetings and vacations,” he said.

“It would be irrational to ask airlines to pay compensation if the delay or cancellation is out of control. The examples would include an extreme climate event, a terrorist attack or a pandemic.

“The examples of cancellations within the control of the airline are the scarcity of the crew, the mechanical problems (if they could have been avoided with the proper maintenance) and operational problems.”
He also supported mandatory refunds for customers affected by cancellation or delay.
“Can you think of an industry in which you pay for a service, you don’t receive the service and do not recover your money? If you do not get what you paid, a refund must be an automatic right, regardless of reason. It is as simple as that,” he said.

“There are many situations in which consumers have bought tickets very much in advance to obtain the best price. If the flight is canceled and have to reach their destination, they must reserve again in the same airline or an alternative. It will generally result in that they pay significantly more. Who covers that cost?”

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