Jetstar’s boss has suggested that new aviation consumer protections posed a threat to the existence of the low-cost carrier, saying the regime would leave the airline lumbered with higher costs and on the hook for problems over which it has no control.
The government plans to introduce a landmark aviation consumer protection scheme, which it says will enshrine the rights of consumers in a transparent framework.
As airlines pushed back against the design of the framework, Jetstar chief executive Steph Tully, told a Senate committee on Friday that the Aviation Consumer Protection Charter is structured in a way that erodes the viability of Jetstar.
“We’ve really got a prescriptive one-size-fits-all draft in the charter, which, to be honest, would undermine Jetstar’s existence.”
“There are many things that we are seeing in the charter that are just not pragmatic,” she told the Senate Rural and Regional Affairs and Transport Legislation Committee.
Airlines are pushing back against being blamed for delays they see as outside their control – from air traffic control bottlenecks to infrastructure failures at aero-bridges and baggage carousels.
She also said any rule that would hold the airline selling the ticket as the responsible party for customer service, rather than the airline operating the flight, wouldn’t be consistent with the global standard. Airlines worry that this could mean they are responsible for the customer service failures of their code-share partners.
The Charter, part of a series of bills designed to enshrine passengers’ rights, sets out the minimum standards that aviation consumers can expect from airlines and airports.
Even as on-time performance for airlines has improved in recent months, passengers who have had flights cancelled or delayed for excessive periods face a patchwork of bodies to lodge complaints with.
In testimony, representatives from Jetstar, Qantas, and Virgin pushed back on the structure of the Aviation Consumer Protections framework, stressing they had commercial incentives to deliver good customer service for passengers.
Airlines for Australia & New Zealand chair Graeme Samuel AC noted that section 61 of Australian Consumer Law says that any service provider – including in the world of aviation – is obliged to provide a service that is fit for the purpose. Further clarification of that definition in aviation could achieve a goal of the coming legislative reform, he said.
Consumer advocates Australian Lawyers Alliance welcomed the creation of an Aviation Consumer Ombudsperson, “with the power to make binding decisions in air passenger consumer disputes” as a “positive step”.
“For too long, Australian air passengers have lacked a simple, affordable and accessible way to enforce their limited consumer rights,” said ALA spokesperson Victoria Roy.
But the legislation lacked a “passenger bill of rights with rights and obligations”, Roy said.
Passenger customer service issues have remained an emotive topic, both because of the airlines’ response, and the episodes of flight cancellations and delays across the industry after COVID lockdowns ended.
Labor Senator Corinne Mulholland queried whether Jetstar made customers aware of their rights when purchasing non-refundable fares which “are marketed to often vulnerable consumers who… may also not necessarily be advised about what their legal rights are under the Australian Consumer Law.”
Tully expressed confidence that Jetstar remained in compliance with all existing consumer law. She said that Jetstar policies “differ whether a delay or cancellation is inside our control or outside our control, which is why those definitions are very important and shouldn’t be undermined” with the new legislation.
Transport Minister Catherine King has championed the “Australian-first” aviation consumer protection scheme as providing “greater protections to the travelling public while making airlines and airports more accountable”.
Before the writing of the legislation, the government commissioned a survey of 4000 Australians’ experience of travel, which found that when they encounter a disruption, a full 95 per cent did not complain.
Yet, representatives from Qantas, Virgin and the industry groups Airlines for Australia & New Zealand suggested the legislation itself could worsen the situation and drive up prices.
Jetstar’s Tully said, “Airlines are extremely motivated to get this right. It’s lower cost for us to get it right. Our people are happier working when we get it right, and we know customers like us more when we get it right.”
When the issue of market power emerged (Qantas Group, which includes Jetstar and Virgin, last year accounted for 98.3 per cent of domestic flights according to the competition regulator), Samuel, a former chair of the competition watchdog, said: “Duopolies do compete vigorously with each other on price and on service. Monopolies don’t compete with anyone.”
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Chris Zappone is a senior reporter covering aviation and business. He is former digital foreign editor.Connect via X, Facebook or email.
