Qantas warns if customer compensation is introduced, they would raise ticket prices

Qantas has warned a Senate committee that any passenger refund laws brought into Australia would result in higher prices for tickets. Qantas domestic CEO Markus Svensson told an inquiry into passenger rights on Monday that an EU-style compensation-based scheme would not help consumers in terms of reduced delays or cancellations.

“Compensation-based regimes such as those in Europe and Canada have shown these schemes do not deliver better outcomes for consumers in terms of reduced delays and cancellations, and they increase the cost of travel,” he said.

“The potential effect on fares, implications for low-cost carriers and the likely negative effect on economically marginal routes – particularly on Australia’s regional network – should all be closely considered.”

Svensson said that when delays or cancellations were “within our control”, Qantas already provided a refund, rebooking or any other remedies required by law.

The inquiry into the airline passenger protections bill, designed to ensure “concrete protections” for passengers, was brought on by a series of Qantas scandals that have infuriated the travelling public.

In 2024, Qantas was ordered to pay $120 million in fines and compensation for booking customers on already-scrapped services. Qantas also forced passengers to accept flight credits for pandemic disruptions rather than the refunds they were entitled to.

The so-called “pay on delay” legislation, introduced last year by the Coalition and separate from a planned Ombuds Scheme supported by the Albanese government, would establish penalties for Australia’s airlines in the event of flight delays, cancellations or denials of boarding.

Virgin Australia government affairs spokesman Stephen Beckett said his airline supported a “beefed up” complaint-handling body with the ability to make binding decisions, as well as “building greater awareness” of consumer law to “make remedies more accessible to the travelling public”.

Nationals senator Bridget McKenzie, sponsor of the “pay on delay” bill, cited Qantas’ sale of tickets for already-cancelled flights – so-called “ghost flights” – as a reason for creating a mandatory compensation system.

“That was an explicit breach of consumer trust,” McKenzie said. 

“If Qantas was willing to knowingly sell those ‘ghost tickets’, why should passengers trust that the voluntary consumer protections that you offer in your own policies are enough?”

The ability for Australian airlines to cancel flights with little or no penalty has emerged as a feature of the industry.