Australia’s Unfair Airline Downgrade Policies Need Reviewing

Airlines Need to Review their Unfair Downgrade Policies

Last week, we brought you the story of the Qantas passengers that were involuntarily downgraded on a flight from Tokyo to Melbourne after their Business class seats became inoperable. They were not given any alternative but to accept the airline’s paltry offer of compensation – which they still have not received because they’ve since been unable to contact Qantas.

Sadly, this is far from a one-off incident. Many other AFF members have shared similar stories about poor treatment and inadequate compensation after being downgraded by Qantas. It has become abundantly clear that the current Australian airline downgrade policies are broken. They are one-sided and unfair, and many AFF members are now calling on the ACCC to investigate.

Here are just a few of the stories posted by AFF members:

We flew Qantas Melbourne to JFK QF93 /QF11 business class. Qantas cancelled QF11 and booked us on Delta 468 economy class, non code share, so no points granted. As usual Qantas staff had no idea how to deal with the problem. Told us to deal with Delta. We finally got a reply from Qantas via feed back forum. They offered us $410 dollars compensation, and no further correspondence would be entered. We chose Qantas against our better judgement to support our national carrier. Never again.

In 2016 on a SYD-JNB flight I too was downgraded by Qantas. Your experience was better than mine though OP, the check-in agent at the Business class counter didn’t even bother to inform us. I only realised we were in Economy when I looked at our boarding passes. When raised at the customer service desk we were told (by a supervisor who I still vividly remember as appearing to be ‘under the influence’) that there would be no compensation and our choice was either to fly in Economy or not fly at all.

I’ve had this experience too where I’ve been downgraded. Nothing mentioned, just noticed Y instead of J on the boarding pass. I was also told no compensation. Thankfully I knew better than to just accept that rubbish.

Had a similar experience last month. Qantas tried to downgrade me to premium economy on a flight from Haneda to Sydney. I was offered $400 cash and a points refund. They admitted to being overbooked and obviously as a bronze FF I was high on their list to downgrade.

Inadequate compensation

There are two main issues here. The first problem is that the amount of compensation provided is totally inadequate in many cases. Often, it does not even cover the difference between the Business class ticket price that was paid and the price that the passenger would have paid for the cheapest available Economy ticket at the time of booking.

When a passenger is involuntarily downgraded by an airline, the airline is often causing them huge inconvenience and is not providing the service that has been paid for. (In fact, a German court recently ruled that Economy class is not an adequate substitute for a paid Business class ticket due to the substantial differences in the product and service.) The compensation on offer should reflect this inconvenience – not leave the customer out of pocket!

You can read about Qantas’ current downgrade compensation policy here: Qantas Downgrade Compensation is Woefully Inadequate

The European Union has mandated minimum compensation amounts for passengers that are involuntarily downgraded, which Qantas honours for tickets booked in Europe. But there is no existing legislation in Australia.

We do have the Australian Consumer Law, which airlines in Australia must follow. This requires businesses to provide services that are fit for purpose and as-advertised. The Australian Consumer Law also covers compensation for damages and loss that occurs because of a problem with a product or service. While this legislation may apply in some circumstances, it is not really intended to apply to airline downgrades.

Poor treatment of downgraded passengers

The second key issue with the current system is the systematic poor treatment of airline passengers that receive involuntary downgrades.

There are so many ways to resolve overbooking situations that minimise disruption, such as contacting passengers in advance to offer an alternative flight. If nobody is willing to change flights, airlines can ask for volunteers – and increase the amount of compensation on offer until somebody is willing to take it. (If nobody takes the offer, it’s probably because the offer isn’t good enough!)

Yet, in so many cases, the airline has not bothered asking for volunteers. Instead, it has simply chosen the passengers with the lowest frequent flyer status and told them they were being downgraded. (And in some cases, Qantas did not even bother to tell the passengers!)

According to Section 4.7 of the Qantas Conditions of Carriage, the airline will give you the option of travelling on an alternative available Qantas flight if they need to “ask you to downgrade”. Yet, in the recent case with Janet Riddell, Qantas did not offer any alternative flight options.

This is not even the worst part. After taking the flight, the customer is then left to chase the airline for the compensation they are rightfully owed via the regular customer feedback channels. This can be time-consuming for passengers as the wait times for the Qantas call centre remain unacceptably long, and it can take up to two months for Qantas to reply to emails!

This is simply not good enough. Airlines should proactively contact the passenger as soon as possible to discuss compensation – and not the other way around.

Virgin Australia is also guilty

Although most of the horror stories on AFF are from Qantas customers, the airline is not alone.

Last year, Virgin Australia cancelled a flight from Queenstown to Sydney and rebooked the Business class passengers onto an Air New Zealand flight in Economy. The affected AFF member waited many weeks to receive compensation, which ended up being the difference between their Business class fare and the most expensive, fully-flexible Economy Freedom fare. The refund amounted to around $50 per ticket, which is simply appalling.

Calls for the ACCC to investigate

Many AFF members have called on the Australian Competition & Consumer Commission (ACCC) to look into that the way in which airlines are calculating compensation payments for involuntary downgrades. It’s one-sided and generally unfair to the customer, who is often forced to take whatever the airline is offering.

Until the airlines are forced to review their policies and procedures, it sadly seems unlikely anything will change.

Here are some of the comments that have been posted on AFF:

I really hope ACCC gets into this. Why they have done 2 recent airline reviews and did not touch this issue, I do not quite understand. Moving someone from biz to full fare economy is not a good client experience.

We need ACCC to wake up and sort this out. They have had several activities on the airline industry in the last few years, why are they ignoring this airline rort?

I’m glad on one hand it wasn’t a simple case of overbooking, as that would be appalling. But at the same time this is no way to deal with a paying pair of J pax. I think a complaint to the ACCC is in order.

A review of Qantas Cabin “Downgrade” Policy being fair & equitable to both parties is overdue.

This post from Mrmaxwell on the AFF forum sums up the issue nicely:

Sure – things happen when flights are overbooked, technical issues, etc. But to stuff your customers around, not give them what they paid for and then make them chase up some crappy compensation at the other end is terrible.

Join the discussion on the Australian Frequent Flyer forum: Qantas Business Class customers bumped to economy in Tokyo

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]