If Australia had this, passengers could be paid for cancelled flights

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Why Australia needs an aviation ombudsman.

The financial difficulties of Rex Airlines, coming so soon after the bankruptcy of Bonza, have brought into sharp focus one of the federal government’s key priorities for aviation: enhancing passenger rights.

In each case, passengers were left with tickets for flights that did not fly. In the case of Rex, tickets were honoured by rivals Virgin Australia and Qantas, possibly trying to recapture the small toehold Rex had established in the Brisbane-Sydney-Melbourne golden triangle.

The Bonza story was more complex as the fledgling airline, which collapsed in May, had sought to exploit under-serviced routes to smaller leisure-based cities including Maroochydore and Port Macquarie.

In many cases, passengers were left out-of-pocket and stranded.

People boarding a Rex Airlines flight

Passenger rights have been brought into sharp focus after the recent financial difficulties of Rex Airlines and Bonza.

Support for an ombudsman

These failures will have emboldened the federal government’s plans to introduce stronger passenger protections and an airline ombudsman.

The release of its policy white paper is imminent. The paper covers aviation issues including competition between airports and airlines, the sector’s environmental impact and better mechanisms for consultation.

After years of opposition, Qantas and Virgin quietly fell in behind the idea in May, signalling a deal is close to being announced.

The ombudsman is designed to protect consumer rights in what is often monopolistic or quasi-monopolistic operating environments. With the exception of residents of southeast Queensland and the western suburbs of Melbourne, most Australians only have one airport from which to fly.

This, coupled with an effective airline duopoly, can lead to higher prices and poorer service for consumers, the Australian Consumer and Competition Commission (ACCC) has argued.

People boarding Bonza flight
Bonza suspended all flights and entered voluntary administration on 30 April.

The ACCC has been calling for better passenger rights for more than a decade. But its calls grew louder after it fined Qantas A$120 million for selling “ghost" flights in May.

Passengers did receive refunds, but the process was not easy compared to many overseas jurisdictions where compensation is automatic and based on distance travelled.

Australia is rare among developed countries for not having automatic compensation if a flight is cancelled or delayed.

The EU model

The leader in air passenger rights, as in many areas of consumer protection, is the European Union. The EU Passenger Rights regulation is 20 years old and now also applies to rail and bus passengers.

The regulation favours the passenger and awards compensation of up to €600 (almost A$1,000) for delays or cancellations. There are clauses for when a delay is unavoidable, but generally airlines have now built the scheme into their costs of doing business.

The scheme is well publicised and in 2022, about eight million passengers were eligible for refunds.

Air passenger rights in the UK continued in the EU mould after Brexit and were even strengthened.

But in a 2023 review into the UK scheme, some airlines argued “private insurance was a better option for some passengers", particularly those with disabilities.

The same reasoning led to the removal of Australia’s previous consumer protection scheme for airline passengers, the Travel Compensation Fund, which refunded customers when airlines or travel agencies went bankrupt.

Rex flight on ground
Australia’s Travel Compensation Scheme was abolished in 2014. (Image: Josh Withers)

The scheme was ended under the Abbott government in June 2014, with travellers told instead to take out their own travel insurance.

Labor is expected to reintroduce an element of corporate responsibility for airline delays, not least since Brazil, Canada and Türkiye have also followed the EU’s lead.

Brazil’s scheme is particularly generous, with up to R7,500 (A$1,950) available to passengers who have to pay for last minute accommodation if their flight is cancelled.

Lawmakers there countered claims by airlines that low cost airline passengers could stay in cheaper hotels, by applying the compensation uniformly, regardless of travel class.

Air passenger rights can be a vote winner, too. Before he withdrew his bid for reelection, US President Joe Biden trumpeted the automatic airline compensation scheme the US Department for Transportation will bring in this year.

Until now, airline compensation was mandated by the states without coordinated processes meaning some airlines used vouchers, some credits and a few cash to compensate customers.

Despite this, about US$3 billion (A$4.6 billion) in refunds have been issued to US passengers since 2020, including more than US$600 million to Southwest Airlines passengers alone.

This was due to a serious scheduling crisis which forced the low-cost carrier to cancel almost 60% of its flights in the 2022 summer.

By contrast, in Australia, air passengers have only had basic protections under consumer rights law since deregulation in 2002.

There is no guarantee of a seat or even flight the consumer purchased. This has led consumer advocates including Choice to support calls for an airline ombudsman and automatic delay and cancellation compensation.The Conversation

Rex flight in air
Australia offers weak consumer protection in a market with little competition. (Image: David Syphers)

Justin Wastnage, Adjunct Industry Fellow, Griffith Institute for Tourism, Griffith University.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Justin Wastnage
Justin Wastnage is the principal at aviation and tourism policy consultancy Message Shapers. In this position he has led research projects into cruise ship access options for Sydney Harbour, air transport access to New Caledonia and work around privatisation of council-owned airports in New South Wales.
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How a $1 deal saved Bendigo’s historic tramways

The passionate community that saved Bendigo Tramways has kept the story of this city alive for generations.

It was an absolute steal: a fleet of 23 trams for just $1. But such a fortunate purchase didn’t happen easily. It was 1972 when the Bendigo Trust handed over a single buck for the city’s historic collection of battery, steam and electric trams, which had transported locals since 1890.

inside the historic Bendigo Tram
Bendigo Tramways is a historic transport line turned tourist service. (Image: Bendigo Heritage)

The city’s tram network had been declared defunct since 1970 due to post-war shortages in materials to upkeep the trams and declining passenger numbers as motor vehicles were increasing. However, determined locals would not hear of their beloved trams being sold off around the world.

The Bendigo Trust was enlisted to preserve this heritage, by converting the trams into a tourist service. The Victorian government approved a trial, however news spread that the Australian Electric Tramways Museum in Adelaide had acquired one of the streetcars for its collection.

a tram heading to Quarry Hill in 1957
A tram on its way to Quarry Hill in 1957. (Image: Bendigo Heritage)

An impassioned group rallied together to make this physically impossible. Breaking into the tram sheds, they welded iron pipes to the rails, removed carbon brushes from the motors, and formed a blockade at the depot. The community response was extraordinary, and a $1 deal was sealed.

A new chapter for the city’s fleet

the old Tramways Depot and Workshop
The old Tramways Depot and Workshop is one of the stops on the hop-on, hop-off service. (Image: Tourism Australia)

Today, Bendigo Tramways welcomes some 40,000 passengers annually, operating as a hop-on, hop-off touring service aboard the restored trams. Fifteen of the now 45-strong fleet are dubbed ‘Talking Trams’ because of the taped commentary that is played along the route. The trams loop between Central Deborah Gold Mine and the Bendigo Joss House Temple, which has been a place of Chinese worship since 1871, via other sites including the old Tramways Depot and Workshop.

a Gold Mine Bendigo Tram
The fleet comprises 45 trams that have been restored. (Image: Visit Victoria/Robert Blackburn)

Keeping things interesting, throughout the year visitors can step aboard different themed trams. Tram No. 302 becomes the Yarn Bomb Tram, decorated both inside and out with colourful crochet by an anonymous group of locals.

During the festive season, Tram No. 15 operates as a tinsel-festooned Santa Tram, and the big man himself hides out somewhere along the route for excited children to find. And on selected dates, the adults-only Groove Tram runs nighttime tours of the city, accompanied by local musicians playing live tunes and a pop-up bar.

the historic post office turned visitor centre in Bendigo
Visitors can hop on and off to see the city’s sites such as the historic post office turned visitor centre. (Image: Tourism Australia)

As well as preserving the city’s history, however, the continuation of the tram service has kept the skills of tram building and craftsmanship alive in a practical sense. Bendigo’s Heritage Rail Workshop is world-renowned for restoring heritage trams and repurposing vehicles in creative ways.

Locally, for example, Tram No. 918 was transformed into the Dja Dja Wurrung Tram with original Aboriginal artworks by emerging artist Natasha Carter, with special commentary and music that shares the stories and traditions of Bendigo’s first people. You can’t put a price on preserving history. Nonetheless, it was a dollar very well spent.