Interview with 2GB Drive

CHRIS O’KEEFE: Well, imagine a world where we, the Australian travelling population, were given refunds by Australian airlines for flights that have been, I don’t know, disrupted, cancelled or unreasonably delayed. Wouldn’t that be a treat? Our money back for a service that wasn’t delivered. Because as it stands right now, it’s basically just bad luck if a plane is late or a plane’s cancelled. And you might get, I don’t know, an extra packet of cheese and bickies as an apology from the airline, and that’s about it. But unlike other industries, if you don’t provide the service that has been paid for, you generally have to give people their money back, don’t you? In most parts of society. But that does not apply to airlines for some reason. And the Albanese Government wants to change that. Now, I applaud them for this. They’ve announced an aviation industry ombudsman to deal with complaints about airlines and airports. That is a great step, an ombudsman just for the aviation industry. And currently passengers whose flights are delayed or cancelled, they can only really get a refund if the airline cannot offer what they call, quote, suitable alternative arrangements. Well, you’d be able to drive a truck through what is suitable and what is not, right? And even then you usually only get travel vouchers rather than your money back. Well, Federal Minister for Transport Catherine King, she’s behind the push to clamp down on our airlines, and she’s on the line for us. Minister, thank you so much for your time. 

CATHERINE KING: Really good to be with you, Chris.

CHRIS O’KEEFE: Why don’t airlines just hand over cash? Is this a legacy thing? Where does it all come from? 

CATHERINE KING: Well, I think it’s evolved over time. If you look at every time you purchase a ticket, you’re basically entering into a contract with the airline for the delivery of that service. And if you look at different fares, they’ve got flexi-fares, you’ve got a range of other fares, and each of them have got different conditions attached to them. Most of us, when we’re booking for flights, don’t really look at that. We think, what’s the best option, what’s the cheapest option? And that’s what you’re trying to do, get to where you can get to for the best price. But it locks you into a contract basically, and trying to actually either enforce the contract – so having to ring the airline, trying to get through, you know, sometimes the many calls you’ve got to make –  also just knowing what your rights are can be really difficult. So, what we’ve decided to do is set up an independent ombudsperson for aviation– for airlines and airports in particular. So specifically, in the same way we’ve got a one for telcos. And to really allow a development of a guarantee, a Charter of Rights, what passengers can expect from airlines, what they can expect from their airports, and a scheme to actually enforce those rights.  

So, you’ve got rights under Consumer Law. But of course, it depends on the contract you’ve entered into. And so that’s really where there’s been a lot of difficulty, particularly post-COVID when people couldn’t get the services, or that those services have been really significantly disrupted as aviation comes back up. That’s really been concentrating my mind about how do we get a better service for customers. And really, this scheme will not only provide remedies for people, but it also then looks at continuous improvement amongst our airlines and our airports.  

CHRIS O’KEEFE: I always worry when I hear something like a charter of rights, will it be enforceable? 

CATHERINE KING: Yeah, and that’s what we’re planning to do. So, we’ll legislate that. What I’ve done is, I put out a consultation paper today on what does this scheme look like. So, asking some questions about, you know, how long should airlines be given to give refunds, those sorts of things, but then also put an interim person in who will start developing that charter. And we’ll legislate this next year. But people will be able to start, from next year, actually putting in complaints directly to the interim ombudsman while we take the time to legislate this properly.

CHRIS O’KEEFE: Okay. And so, once it is legislated, the ground rules will be set and the airlines and passengers will know exactly where they stand on receiving or giving out a refund, or cash?

CATHERINE KING: Yep. That’s correct. And so, making sure that that’s really clear, about what your rights are, how to enforce them, and if you’re not getting them enforced, then actually being able to go and make a complaint to the ombudsman about that. 

CHRIS O’KEEFE: Okay. In practical terms, Catherine King’s getting a flight from Melbourne to Sydney. Flights delayed, delayed, delayed, cancelled. Once legislated, will the expectation be that if you ask for your money back, you get your money back?

CATHERINE KING: That’s certainly my expectation. If you’re not delivered– like if you don’t get a flight, then you actually get a refund. And that should happen, and obviously that doesn’t happen now because it will depend on the type of flight that you’ve booked. So really making sure that there are very clear rules about what you can and can’t put in the contracts and making sure that they are then enforced. But the consultation paper goes into detail about that. It’s on my Department of Infrastructure and Transport website. We really want people to have a look at it and engage in it, because this has been a really significant gap in our consumer rights, really. It’s been pretty much you’ve got rights, but trying to work out how to enforce them. And then actually whether those rights are reasonable, that they’re the things that are important that we try and get right. 

CHRIS O’KEEFE: Is there a chance that this could drive airfares higher, make airlines charge passengers more? Because you have to flexi fares, the savers, whatever it may be. They’re there because they can charge us fewer dollars because we have fewer rights. Now if they have to give us a refund, will those no longer exist?

CATHERINE KING: Well, that’ll be again up to the consultation. In terms of the ombudsman, they may still say those flights can exist, but there may be some other things that you have to absolutely make sure people have read the terms and conditions. There might be better communication that’s required. So, people are absolutely clear and sure it is what they are purchasing. And then whether it’s unreasonable in terms of- so if something has occurred, obviously if there’s been a really significant weather event or something has happened, but if it’s just that we don’t know if the planes have been overbooked or it’s– it hasn’t got enough passengers on it and they decide to cancel it for unreasonable reasons, then that’s where the ombudsman will really come in and look at how do we actually deal with- was that an unreasonable experience that someone has had. So, it’s, as I said, out for consultation to determine all of those but we don’t want to– we want to see lower airfares. We want to see more competition. We want to see improvements in services. We are seeing some lower airfares now, which is good to see those come into play. But really this is about driving continuous improvement and continuous reform in terms of our aviation sector, because at the end of the day, consumers should be treated– they should get the service that they’ve asked for and paid for. 

CHRIS O’KEEFE: Of course.

CATHERINE KING: And if they don’t, then they should get a refund or an equivalent service.

CHRIS O’KEEFE: Pretty basic expectation, I would have thought. And while we’re here and the fact that you have to do this probably just tells you everything you need to know about the aviation industry. Now, I did notice that you’re also honing in on people with disabilities on airlines. And I’ve heard many, many horror stories myself where people get treated so poorly or it’s so difficult to get on a plane that they just don’t bother travelling.

CATHERINE KING: Yeah, absolutely, and I think we’ve heard that loudly and clearly as well in terms of experiences people have and airports can be overwhelming places. They’re noisy, they’re busy, they can be stressful. You’ve got time constraints to get where you’ve got to go. And I know many airports and many airlines are trying to improve the experiences of people with disabilities, but they’ve got a long way to go. So, introducing a specific disability standard for aviation is important. Making sure that’s being complied with is really part of it. Reviewing to see some airlines have a– which is colloquially called the “two-wheelchair policy”, they may claim that’s for safety reasons. Well, we really want to know is it for safety reasons or what else is happening there to really improve the experience.

CHRIS O’KEEFE: [Talks over] Yeah, sure.

CATHERINE KING: Providing people opportunities to have a profile with the airline and the airport so they don’t have to keep providing every time they book a flight, being able to have to say, well, I have an assistance dog. That’s important to be able to continue to do that so you don’t actually have to do that every single time. So, things like that we think can improve the journey for people with disabilities, who, of course, have every right to travel and should be able to travel around the country and around the world as easily as everybody else does. 

CHRIS O’KEEFE: Minister, as a Labor Minister, we’ve been doing a lot of work on this programme with Rex employees who were made redundant. And as a Labor Minister, are you concerned that the CEO, Neville Howell, they all call him Nifty Nev, six days before Rex went into administration with $500 million in debt owed to 5,000 creditors, Nifty Nev negotiated a juiced up contract that locked in a full year’s salary if he was terminated? A full year’s payout. 600 workers haven’t got a brass razoo yet when it comes to their entitlements. Do you find that as offensive as I do?

CATHERINE KING: I think anyone would find that pretty difficult to swallow. I think, frankly, I think the administrators will obviously have a look at that and what his contractual terms are and what that means in terms of the administration overall. But I think when you’ve got people who have not had their entitlements paid because it’s gone into administration hearing that, I can understand them being really angry about it.

CHRIS O’KEEFE: Would you expect any Rex 2.0 would be in the air without Nifty Nev?

CATHERINE KING: Well, I– that’ll be again a matter for whoever purchases this airline and its associated businesses are for sale at the moment and that is part of the administration process and sorting through who creditors are, how it continues. That’s all a matter of administration at the moment, and I think that will be a matter for whoever purchases the airline as to how they then want to go forward with it.

CHRIS O’KEEFE: Minister, appreciate you coming on. Thanks so much.

CATHERINE KING: Really good to be with you, mate.

CHRIS O’KEEFE: That’s the Transport Minister, Catherine King.