Aviation ombudsman to force airlines to compensate passengers for cancelled or delayed flights

A powerful aviation watchdog will be able to force airlines to compensate customers for cancelled and delayed flights under a major overhaul of passenger protections.

Federal Transport Minister Catherine King will announce the new ombudsman on Monday as she unveils a long-awaited white paper charting a new course for the sector.

“Too many Australians have been left out to dry when flights are cancelled or disrupted and it’s impossibly complex to get a refund or even contact a company representative,” Ms King said.

“Customers deserve to get their money back if they are owed it. Full stop.”

The Federal Government has been examining options to hold airlines accountable amid sky-high passenger anger with the frequency of cancelled flights and difficulties extracting refunds or travel credits out of the carriers.

Consumer advocates and the Australian Competition and Consumer Commission have long-pushed for an airline ombudsman to enforce the rights of Australian passengers.

The ACCC was forced to chase up Qantas for selling seats on already cancelled flights, with the carrier eventually agreeing to a $120 million settlement that will involve pay-outs to more than 85,000 customers.

Labor is now cracking down on the industry, acknowledging the existing airlines-run complaints body — the Airline Customer Advocate — has failed to fix the problems.

The new “Aviation Industry Ombuds Scheme” would be able to force airlines and airports to provide compensation to consumers, publish reports on airline and airport behaviour and refer alleged misconduct to authorities.

It will also provide a dispute resolution service to handle complaints about airports and airlines, which have rocketed since the COVID-19 pandemic wreaked havoc on the industry.

A charter of passenger rights will also be drafted, setting out what refunds’ customers will be entitled to when their flights are delayed or cancelled.

It will also spell out what length of delays are considered “reasonable” and appropriate timeframes for compensation.

Under the scheme, airlines will also have to explain the reasons behind flight disruptions as part of their regular reporting to the Federal Government.

An interim ombudsman will be based inside the minister’s department before legislation to create an independent watchdog is introduced formally to Parliament next year.

The fully independent scheme is expected to be up and running by mid-2026.

As part of the overhaul the Federal Government will also force airlines to remove barriers for disabled passengers after major concerns were aired during consultation on the white paper.

It will draw up new standards guaranteeing the rights of disabled people on flights and the obligations of airlines and airports.

It will also consider banning airline polices that limit the number of people requiring assistance on a flight, and increase compensation for passengers whose wheelchairs are damaged or lost by airlines.

“Air travel is a necessity for many Australians, but those travelling with a disability have had to put up with poor services, inaccessible designs and rules that limit their travel options,” Ms King said.

“Through our consultation we heard clearly that the treatment of people with disability by the airlines and airports is not good enough.”