Big change coming for airlines refunding delayed and cancelled flights

If a flight is cancelled or significantly delayed in Australia, the airline determines whether the customer is entitled to a refund - but this will soon change.

Airline policies around refunds differ, which can be confusing for consumers.

This is why the Australian Government recently released the Aviation White Paper, which includes the establishment of an aviation industry ombudsman.

The ombudsman will be given the power to direct airlines and airports to compensate consumers when their flights are cancelled or delayed.

The ombudsman is expected to create a new aviation charter of passenger rights, to be released for community consultation by the end of 2024.

A spokesperson for the Department of Infrastructure, Transport, Regional Development, Communications and the Arts said the charter will include "when a refund should be paid, when it should be paid in cash, and how passengers should be treated when flights are delayed or cancelled".

The US recently released similar rules, setting out the circumstances under which airlines must provide refunds to passengers.

Here's how flight delays and cancellations are currently dealt with in Australia.

Each airline has its own compensation policy, which the Australian Consumer and Competition Commission (ACCC) says must be published on the airline's website.

A consumer's rights under an airline compensation policy are in addition to their rights under consumer guarantees, the ACCC says.

If a flight is cancelled, most airlines try to move passengers onto the next available flight where possible. However, in some instances, they will refund the money.

Qantas' compensation and refund policy states customers are entitled to a refund in several situations, including if the carrier cancels the passenger's flight and cannot offer suitable alternative arrangements.

If a flight is delayed to the extent the passenger has to cancel their travel, or if Qantas makes a significant change to the flight time and is unable to book the passenger on an acceptable alternative flight, the passenger may ask for a refund.

In September 2024, Skytrans cancelled the most flights (3.3 per cent), followed by QantasLink (3.2 per cent), according to the Department of Infrastructure, Transport, Regional Development, Communications and the Arts.

Cancellations across participating airlines (Hinterland, Jetstar, Qantas, QantasLink, Rex Airlines, Skytrans, Virgin Australia and Virgin Australia Regional Airlines) were down to 2 per cent from 3.6 per cent in 2023.