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If Australia had an aviation ombudsman, passengers could get compensation for cancelled flights

<div class="theconversation-article-body"><em><a href="https://theconversation.com/profiles/justin-wastnage-489752">Justin Wastnage</a>, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a></em></p> <p>The financial difficulties of <a href="https://www.abc.net.au/news/2024-08-02/rex-airlines-staff-notified-of-termination/104172020">Rex Airlines</a>, coming so soon after the bankruptcy of <a href="https://www.abc.net.au/news/2024-06-26/bonza-directors-accused-of-trading-while-insolvent/104022496">Bonza</a>, have brought into sharp focus one of the federal government’s key priorities for aviation: enhancing passenger rights.</p> <p>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.</p> <p>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.</p> <p>In many cases, passengers were left out-of-pocket and stranded.</p> <h2>Support for an ombudsman</h2> <p>These failures will have emboldened the federal government’s plans to introduce stronger passenger protections and an airline ombudsman.</p> <p>The release of its <a href="https://www.infrastructure.gov.au/infrastructure-transport-vehicles/aviation/aviation-white-paper">policy white paper</a> is imminent. The paper covers aviation issues including competition between airports and airlines, the sector’s environmental impact and better mechanisms for consultation.</p> <p>After years of opposition, <a href="https://www.travelweekly.com.au/article/qantas-and-virgin-change-tune-on-aviation-ombudsman-ahead-of-white-paper-release/">Qantas and Virgin quietly fell in behind the idea in May</a>, signalling a deal is close to being announced.</p> <p>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, <a href="https://www.sciencedirect.com/science/article/abs/pii/S0967070X18302063">most Australians only have one airport from which to fly.</a></p> <p>This, coupled with an effective airline duopoly, can lead to higher prices and poorer service for consumers, the <a href="https://www.accc.gov.au/system/files/Airline%20competition%20in%20Australia%20-%20June%202023%20report.pdf">Australian Consumer and Competition Commission (ACCC)</a> has argued.</p> <p>The ACCC has been calling for better passenger rights for more than a decade. But its calls grew louder after it fined Qantas <a href="https://theconversation.com/qantas-has-finally-settled-its-ghost-flights-lawsuit-for-120-million-whats-next-229368">A$120 million for selling “ghost” flights in May</a>.</p> <p>Passengers did receive refunds, but the process was not easy compared to many overseas jurisdictions where compensation is automatic and based on distance travelled.</p> <p>Australia is rare among developed countries for not having automatic compensation if a flight is cancelled or delayed.</p> <h2>The EU model</h2> <p>The leader in air passenger rights, as in many areas of consumer protection, is the European Union. <a href="https://eur-lex.europa.eu/eli/reg/2004/261/oj">The EU Passenger Rights regulation</a> is 20 years old and now also applies to rail and bus passengers.</p> <p>The regulation favours the passenger and awards compensation <a href="https://www.airhelp.com/en-int/ec-regulation-261-2004/">of up to €600 (almost A$1,000) for delays or cancellations</a>. There are clauses for when a delay is unavoidable, but generally airlines have now built the scheme into their costs of doing business.</p> <p>The scheme is well publicised and in 2022, about <a href="https://schengen.news/8-million-passengers-affected-by-flight-cancellations-airport-strikes-are-eligible-for-compensation-of-up-to-e600/">eight million passengers were eligible for refunds</a>.</p> <p>Air passenger rights in the UK continued in the EU mould after Brexit and were even strengthened.</p> <p>But in a 2023 review into the UK scheme, <a href="https://www.gov.uk/government/consultations/reforming-aviation-consumer-policy-protecting-air-passenger-rights/outcome/response-to-the-aviation-consumer-policy-reform-consultation#chapter-3-compensation-for-delays-and-cancellations">some airlines argued</a> “private insurance was a better option for some passengers”, particularly those with disabilities.</p> <p>The same reasoning led to the removal of Australia’s previous consumer protection scheme for airline passengers, the <a href="https://www.travelmanagers.com.au/peaceofmind/#:%7E:text=The%20Travel%20Compensation%20Fund%20continued,and%20until%2030%20June%202014.">Travel Compensation Fund</a>, which refunded customers when airlines or travel agencies went bankrupt.</p> <p>The scheme was ended under the Abbott government in June 2014, with travellers told instead to take out their own travel insurance.</p> <p>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.</p> <p>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.</p> <p>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.</p> <h2>Popular with voters</h2> <p>Air passenger rights can be a vote winner, too. Before he withdrew his bid for reelection, US President Joe Biden trumpeted the <a href="https://www.transportation.gov/briefing-room/biden-harris-administration-announces-final-rule-requiring-automatic-refunds-airline">automatic airline compensation scheme</a> the US Department for Transportation will bring in this year.</p> <p>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.</p> <p>Despite this, about <a href="https://www.transportation.gov/briefing-room/biden-harris-administration-announces-final-rule-requiring-automatic-refunds-airline">US$3 billion (A$4.6 billion)</a> in refunds have been issued to US passengers since 2020, including more than US$600 million to Southwest Airlines passengers alone.</p> <p>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.</p> <p>By contrast, in Australia, air passengers have only had basic protections under <a href="https://consumer.gov.au/australian-consumer-law/legislation">consumer rights law</a> since deregulation in 2002.</p> <p>There is no guarantee of a seat or even flight the consumer purchased. This has led consumer advocates including <a href="https://www.choice.com.au/consumer-advocacy/policy/policy-submissions/2023/november/aviation-green-paper">Choice</a> to support calls for an airline ombudsman and automatic delay and cancellation compensation.<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important;" src="https://counter.theconversation.com/content/235679/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" /><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https://theconversation.com/republishing-guidelines --></p> <p><em><a href="https://theconversation.com/profiles/justin-wastnage-489752">Justin Wastnage</a>, Adjunct Industry Fellow, Griffith Institute for Tourism, <a href="https://theconversation.com/institutions/griffith-university-828">Griffith University</a></em></p> <p><em>Image credits: Shutterstock </em></p> <p><em>This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/if-australia-had-an-aviation-ombudsman-passengers-could-get-compensation-for-cancelled-flights-235679">original article</a>.</em></p> </div>

Travel Trouble

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Embattled MasterChef judge George Calombaris has just been hit with ANOTHER major blow

<p>Embattled celebrity chef George Calombaris has just been hit with another devastating blow after a lucrative deal went down the drain following a week of controversy.</p> <p>WA Tourism has confirmed it has dropped the celebrity chef as face of its food and wine campaign.</p> <p>Calombaris was involved in a six-month advertising campaign promoting gourmet travel in Western Australia, however, the advertisements that were scheduled to run through to September has been pulled from all TV and digital executions.</p> <p>Paul Papalia, who is the state Tourism Minister, confirmed the WA-based company would not be continuing their partnership with Calombaris.</p> <p>“People should pay their employees and what they are owed and what they deserve and that’s really disappointing,” Mr Papalia said.</p> <p>“What George Calombaris has done is terrible.”</p> <p>Mr Papalia said he did not know if the Government would be able to get back any funds from the <em>MasterChef</em> judge.</p> <p><span>The Melbourne restaurant owner and TV judge was ordered last week to pay a</span><span> $200,000 “contrition payment” after a Fair Work Australia investigation found his massive business empire had underpaid 515 staff members by $7.8 million over a six-</span><span>year period.</span></p> <p>Critics and trade unions have slammed the fine as “inadequate” and consequently called on Network 10 to dump the chef from their hit reality television program, <em>MasterChef</em>.</p> <p>While Calombaris insists the underpayments were a mistake and that almost all of his staff had been paid back, the pressure is continuing to mount.</p>

Money & Banking

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Who is Australia’s worst telco?

<p>Optus has fallen hard and fast out of Aussie customers’ good graces, with a report from the Ombudsman reporting a staggering 35 per cent in complaint increases from the last financial year about the telco.</p> <p>Optus Group, which is who the complaints were about, also includes Virgin. The Ombudsman received 40,665 complaints about Optus Group over the last financial year, which is a large spike from 30,120 in the 2016-2017 financial year.</p> <p>Ombudsman Judi Jones said <a href="https://www.news.com.au/technology/online/nbn/report-shows-optus-telstra-some-of-the-worst-performing-telcos/news-story/9fba80849eb6ec2ced4440cefd79fca1">to news.com.au</a> that there were no standout complaints, as issues rose for the telco “across the board”.</p> <p>“We’ve been working with Optus over the course of the year and they have received data from us regularly and have been working hard to address customer complaints,” Ms Jones said.</p> <p>Almost 18,000 complaints were related to mobile phone services, with issues ranging from connection troubles to missed appointments relating to the National Broadband Network (NBN).</p> <p>Although it might look bad for Optus, they’re not alone in an increase in customer complaints. Telstra received 85,500 customer complaints, which is an increase of 7.7 per cent from last financial year.</p> <p>Ms Jones said that the reason Telstra attracts so many complaints is that “they’re a much larger provider than other telcos”.</p> <p>Australian Communications Consumer Action Network (ACCAN) chief Teresa Corbin said that this continues to be a problem for Aussie telcos.</p> <p>“We believe that the government directed introduction of the Australian Communications and Media Authority’s new complaint handling standard and record keeping rules for NBN services contributed to this trend,” Ms Corbin said.</p> <p>Have you made a complaint about an Aussie telco? Let us know in the comments.</p>

Technology

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Woolies' disgrace: Staff short-changed

<p>Woolworths has been thrown under the microscope by the Fair Work Ombudsman (FWO), after an investigation found cleaning contractors were paid as little as $7 an hour.</p> <p>The inquiry, which commenced in 2014, found cleaning contractors at 90 per cent of Woolies outlets in Tasmania were not complying with workplace laws, and the major supermarket has been accused of failing to monitor this behaviour.</p> <p>“Our inquiry found deficiencies in Woolworths’ governance arrangements with regard to its procurement and oversight of cleaning contracts, resulting in serious exploitation occurring at multiple levels of its cleaning supply chain,” Fair Work Ombudsman Natalie James said in a statement on Wednesday.</p> <p>“We uncovered breaches across 90 per cent of Woolworths’ Tasmanian sites, including cases of contractors paying cleaners as little as $7 per hour for training and $14 per hour for work — well below their legal entitlements.”</p> <p><a href="http://www.news.com.au/" target="_blank"><span style="text-decoration: underline;"><em><strong>News.com.au</strong></em></span></a> reports none of the cleaning contractors are still with the supermarket and Woolies has introduced mandatory audits of third-party cleaning contractors in the past three years, but the FWO still criticised the supermarket for its record-keeping.</p> <p>“Overall, record-keeping by contractors engaged at Woolworths’ sites was abysmal,” Ms James said.</p> <p>“At 84 per cent of sites, workplace records were inaccurate or not kept at all. The impact of record keeping failings is exacerbated by the use of cash payments which, while lawful, make it difficult to determine with any certainty the extent of underpayment of wages by the contractors.</p> <p>“Such blatant and widespread breaches of workplace laws are clearly unacceptable, and echo the findings of our previous inquiries into supply chains employing low-skilled and vulnerable workers.”</p> <p>The inquiry also reportedly suggests that while cleaning performance of the contractors was regularly checked and scored by the supermarket, the approach led to a “culture of noncompliance” prevalent in its supply chain.</p> <p>“Woolworths should have been putting the same effort into monitoring its contractors’ compliance with workplace laws as it did into scrutinising the cleanliness of their stores,” Ms James said.</p> <p>“It is not enough for businesses to simply have governance systems in place if they do not follow up to check that contractors within their networks are complying with those systems.</p> <p>“Businesses need to step up and be active in their responsibility to ensure that workers in their supply chains are being paid appropriately and treated fairly.”</p> <p>Ms James acknowledged the work Woolies has done in recent years to bring it back into compliance, but argues that there is still a lot that the supermarket can do.</p> <p>“While we acknowledge that Woolworths has since taken steps to improve compliance within its labour supply chain, it is clear from our findings that at the time of the Inquiry a culture of noncompliance was prevalent amongst contractors on its sites,” Ms James said.</p> <p>Woolies were quick to reply with their own statement, with a spokesman saying they would, “continue to work closely with the Fair Work Ombudsman as we incorporate enhanced management of our cleaning contractors throughout Australia”.</p> <p>“We’re also committed to paying cleaners if they’re found to be underpaid for cleaning services provided to Woolworths, and where the relevant subcontractor employing entity fails to rectify the underpayments,” he said.</p> <p>“Cleaners are an integral part of our store teams, providing an essential service across Woolworths’ sites, not just in Tasmania, but nationwide. We’d like to thank them for their continued hard work and support of our store teams”.</p> <p>What are your thoughts? Do you think Woolies has a case to answer for?</p> <p> </p>

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