The government’s proposed Aviation Consumer Protection Framework has faced opposition from Australia‘s aviation industry. Industry groups argue that placing additional regulatory demands on airlines will increase the costs of airline services and ultimately result in higher ticket prices. This warning was issued as the Australian government continues to put in place new laws to provide greater clarity on passengers’ rights when flights are delayed, cancelled, or disrupted.
A4ANZ and RAAA both support stronger outcomes for consumers but believe the Aviation Consumer Protection Framework should not be an additional regulatory burden. The Chair of A4ANZ, Professor Graeme Samuel, expressed his appreciation that the Australian government had clarified its position with respect to certain issues (e.g., adverse weather conditions and matters related to air traffic control) not falling within the scope of the proposed framework; however, Professor Samuel cautions that “more bureaucracy means more cost” according to a Travel Weekly article.
The focus of this discussion is around proposed legislation that would provide two services. The first is an Aviation Consumer Protection Charter that will establish minimum passenger rights across the industry and provide a method of lodging a complaint through the ombudsman scheme if no solution can be found with an airline or airport.
The Department of Infrastructure aims to set out a clear and consistent baseline for all passenger rights, such as cancellations, delays, baggage problems, how to make a complaint and what support is available if you have a disability, via the Aviation Consumer Protection Charter.
The second service will be the establishment of the Consumer Ombudsman. The government anticipates its operational launch in 2015, following the passage of enabling legislation. In the meantime, an interim ombudsman has been appointed out of the Department of Infrastructure but will have very limited powers and no formal complaint resolution process or investigation authority. This means that until the new scheme is in place, passengers will continue to have to rely on existing channels to lodge complaints.
Airlines have concerns about not only the standards that apply to airlines but also the structures behind those standards. The consultation document suggests creating a new Aviation Consumer Protection Authority (ACPA) along with an ombudsman role; new laws would also let regulated companies be charged to support this system. There are fears among industry groups that the additional compliance, administration, and funding obligations will have a disproportionately negative impact on carriers already struggling with increased fuel costs, airport charges, and increased government fees.
This tension illustrates a broader policy challenge: strengthening consumer rights while avoiding any adverse impact on competition or increasing the costs associated with air travel. The Australian Competition and Consumer Commission (ACCC) has made clear that its airport and aviation guidance does not regulate airlines or airports in the way some may expect, and this is why the government is pursuing the establishment of a new dedicated structure to regulate the aviation industry. However, the ACCC also continues to give aviation high priority within its overall competition and consumer programmes.
Regional Australia has a particularly high set of stakes. The RAAA said that aviation is an essential service for remote communities, not a luxury, so an increase in operating costs has the potential to mean fewer flights, increased airfares and reduced viability of routes. The main remaining question as the consultation process on the framework continues is, will Australia have the ability to create a system that protects passengers more substantially without driving them further from flying by price?
