Air Australia goes bust

Stranded ticketholders highlight need for new protections.
 
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01.Call for compensation

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The stranding of Air Australia passengers is just the latest example of the need for a built-in passenger safety net in the airline industry and a travel industry ombudsman to make sure it works - something CHOICE called for in a submission to government in April last year.

Few experiences in the consumer marketplace are less pleasant that showing up at the airport and finding out you’re going nowhere. 

And it’s one that has become more common and more disruptive, as Qantas passengers around the world discovered last year.

What CHOICE is calling for

We laid out a clear case for a compensation scheme including insolvency protection, but Air Australia passengers will have no such support.

Airlines in the UK, for example, charge a small levy on airline tickets to be used to help travellers stranded by airline failures. Australia’s take on this, the Travel Compensation Fund, only covers travel agent collapses, not airlines.

This latest incident has left about 4000 passengers with nowhere to go and, in many cases, no way to get their money back. 

As Air Australia said in a statement: “Unfortunately if you paid by cash, it is likely you will not be entitled to a refund unless you took out insurance and that insurance covers an event of insolvency.” Unfortunately, many travel insurance policies don’t cover such events.

As we pointed out in our submission, existing protections like credit card chargeback, insurance or Australian Consumer Law fall woefully short of protecting consumers in the increasingly unpredictable air travel market.  

Air Australia (known as Strategic Airlines until a name change in November last year) says it is “highly unlikely there will be any flights in the short to medium term”. If affected you can contact the company at 135 320 or email

The defunct carrier says “we will answer your questions as soon as possible but please understand we have a backlog of questions already”.

For more News, see Consumer news.

 
 

 

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