Flight Centre and its subsidiaries Aunt Betty, Travel Associates, Student Universe, Universal Traveller and Jetescape Travel (trading as Byojet Travel) will refund thousands of customers who were charged $300 per person to get a refund for a cancelled international flight or $50 for a domestic flight.
Travel agency angered customers by charging a $300 fee for each element of trips cancelled due to COVID-19.
The Australian Competition and Consumer Commission (ACCC) was preparing to launch court action against Flight Centre for charging fees for refunds before the company agreed to end the practice.
“This is a very welcome move made by Flight Centre for thousands of customers impacted by COVID-19 travel cancellations,” ACCC chair Rod Sims said.
“We are continuing to discuss issues in relation to refunds and cancellations with the travel sector and encourage travel providers to treat consumers fairly in these exceptional circumstances.”
The ACCC has received more than 6000 complaints from consumers dissatisfied with travel companies’ refund policies and cancellation fees, with thousands more contacting their local state or territory fair trading agencies seeking assistance resolving individual disputes.
The Flight Centre policy, in particular, had some bizarre outcomes. According to The Guardian, one Gold Coast family was asked to pay $2100 in cancellation fees for a hotel refund of $1600 for their seven-person Disneyland trip.
The waiver will apply retrospectively to 13 March, and will include any services cancelled by travel providers booked through Flight Centre or Flight Centre-owned businesses.
“The decision to waive fees will impact our business, nevertheless we have heard your feedback and we believe this step is the right one for the current economic conditions where stand downs and job losses are a daily occurrence for many Australians,” said Flight Centre executive general manager Allisa O’Connell.
Travel restrictions have thrown the travel sector into a spin. The substantial losses incurred by COVID-19 have led to some questionable practices by some travel providers.
To mitigate losses, the sector has stressed its preference for giving credit notes, rather than refunds, in the case of cancelled travel.
In light of the significant damage done to the industry, ACCC chair Rod Sims has called on consumers to remain patient and sympathetic.
“While we know some consumers are very concerned about getting a refund or credit for their cancelled travel plans, we do ask people to be mindful of the significant impact that this pandemic has had on the travel industry,” he said.
“We ask consumers to remain patient and be mindful of the significant pressures on businesses at this time and, where possible, contact the business by email or website, rather than by phone,” he said.
“These are very complex issues and may take smaller businesses more time to respond.”
However, just days after Flight Centre said it would be dropping its cancellation fees, the Australian Federation of Travel Agents (AFTA) urged agents to continue to charge cancellation fees where they are “allowed and reasonable”, adding that Flight Centre’s position does not reflect a broader industry position, nor “remove any ability for a travel agent to charge fees for service either in the booking or cancelling of travel”.
“Travel agents can, will and should continue to charge cancellation fees in line with the current legal framework … as long as this is not misleading or excessive then a charge is a reasonable thing to do,” said AFTA.
ACCC chair Rod Sims also confirmed that agents should “look to their terms and conditions and that the matter is in fact a contractual one given that the consumer guarantees do not apply in light of the government intervention”.
AFTA CEO Jayson Westbury said agents, “are well within their legal rights to charge a fee for the services they render to a client”.
“Suppliers remunerate travel agents for booking travel and typically do not pay agents for time spent on cancellations. As many consumers have found out during this pandemic, the cancellation process is not simple.
“In the current market, the time needed to cancel often complex itineraries, negotiate with multiple suppliers, establish and read the plethora of supplier-issued terms and conditions and work out what is in the client’s best interest and then action an outcome takes significant time.
“In these circumstances, it is completely unreasonable to expect any agent to work for free.”
For more information on consumer rights and obligations of businesses during COVID-19 please visit accc.gov.au
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