Australia's airlines are being urged to overhaul their customer service practices after being accused of "systemic breaches" of consumer law by consumer group Choice.
Choice has lodged a "super complaint" with the Australian Competition and Consumer Commission asking the watchdog to investigate whether domestic airlines are ripping off passengers when it comes to dealing with flight delays, cancellations and unfair fees.
The consumer group claims airline passenger complaints have reached "epidemic proportions" and there is a need to shed light on whether airlines treat their customers fairly when it comes to complaints following a six-month investigation into the industry.
Choice's "Fare Play?" report, released on Tuesday, examines policies of Qantas, Virgin Australia, Jetstar and Tiger.
It found nearly a third of travellers had a problem with flights in the past twelve months, with three-quarters of problems related to delays and cancellations.
Other major problems cited were difficulties making changes to bookings, cancellation or change fees, and difficulties claiming a refund.
Of Australian travellers who experienced a problem with their flights, about 18 per cent reported hidden fees or charges; 11 per cent said they had difficulty making changes to their trip; 10 per cent reported a problem with charges associated with cancellations or changes and four per cent reported a problem claiming a refund.
Matt Levey, director of campaigns at Choice, said the investigation revealed "the significant power imbalance" between consumers and airlines, which were not being held to the same basic standards as other industries.
"Businesses across the country are banned from making blanket 'no refund' claims, but the airlines do so blatantly when selling tickets," Mr Levey said.
Under Australian Consumer Law, consumers have a right to a refund no matter how many times an airline displays a "no refund" message while booking online, he said.
A Qantas spokesperson said the Choice report is selective about facts and mischaracterises the law around refunds.
"Our Terms and Conditions are fully compliant with Australian Consumer Law and they are clearly disclosed on our website," the spokesperson said, adding that it offers refunds under "certain circumstances."
Qantas' budget carrier Jetstar said unlike retailers with returned goods, airlines can't re-sell a seat after a flight has departed with empty seats, and its fares and conditions reflected this.
ACCC chairman Rod Sims said the watchdog will review Choice's report for potential breaches of consumer guarantees or unfair contract terms under the Australian Consumer Law.
Last week Virgin Australia, Jetstar and Tigerair Australia agreed to stop automatically adding extras such as travel insurance to its customers' online bookings following concerns by the ACCC that travellers have been inadvertently paying for unwanted extras, Mr Sims said.
As well as urging the ACCC to take action against the airlines, Choice wants the industry to immediately remove 'no refund' signs from their online checkouts and to remove 'no show' clauses - where tickets are cancelled if customers don't show up for flights - from their contracts.
