Aviation Green Paper series: competition and consumer protection

22 September 2023

The Aviation Green and White Papers

The Aviation Green Paper is a wide-ranging consultation paper through which the Commonwealth Government is seeking feedback on key issues affecting the aviation industry now and into the future. Responses to the Green Paper will inform the drafting of the Aviation White Paper which will set out the Government’s long-term policies for the aviation industry to 2050.

HWL Ebsworth Lawyers will be releasing a series of insights highlighting the key issues raised in the Aviation Green Paper.

Chapter 03 – competition, consumer protection and disability access

In this update, we will cover Chapter 3 of the Green Paper entitled “Airlines, airports and passengers – competition, consumer protection and disability access settings”.

Competition and consumer issues in the aviation industry are highly topical and a current area of focus for the Government. In addition to the Green and White Paper processes:

  • In June 2023, the ACCC issued its final report into airline competition in Australia1;
  • In August 2023, the Commonwealth Treasury established the ‘Competition Taskforce’ to identify potential reforms, including in relation to transport; and
  • The ACCC has recently been active in investigating allegations of anti-competitive behaviour and opposing proposed actions it sees as detrimental to competition.

The Green Paper sets out observations and statistics regarding fares, routes, on-time performance and the competitiveness of Australia’s aviation market. It then asks the public to make submissions on a series of propositions which are summarised below.

Introduction of passenger rights regulation?

Australia has no aviation-specific consumer protection laws. Passenger rights are dealt with under the Australian Consumer Law which, amongst other things, imposes guarantees that services will be provided within a reasonable time and prevents unfair contract terms in airline tickets. The Civil Aviation (Carriers’ Liability) Act 1959 also covers liability and compensation for lost and damaged bags.

Consumer groups have long advocated for the introduction of a passenger rights charter, similar to that imposed in Europe, which would provide compensation to passengers for certain flight delays and cancellations. In the past, airlines have successfully argued that such regimes are not necessary in Australia given our strong consumer laws and the role played by the Airline Consumer Advocate. Airlines have also pointed out that on-time performance depends on various factors, many of which are outside the control of the airline, such as weather and the unavailability of third party services or facilities.

However, the Green Paper notes that passenger complaints, flight delays and cancelations remain well above long-term trends and suggests that the current legislative settings may no longer be sufficient. It asks the public to make submissions on whether or not:

  • a Passenger Bill of Rights or similar scheme should be implemented in Australia;
  • the Government should otherwise change the current consumer protection arrangements;
  • the Airline Consumer Advocate should be expanded; and
  • refinements to the Civil Aviation (Carriers’ Liability) Act 1959 should be made, particularly in relation to liability for lost or damaged baggage.

The introduction of a passenger compensation framework would constitute a highly significant change to the regulation of public air transport in Australia that would likely increase costs, require a major overhaul of airline terms and policies and mandate a renegotiation of arrangements with third parties who impact on-time performance.

It is imperative that air operators and industry participants provide their view on any potential passenger compensation regime and how it could be fairly implemented.

Cabotage framework

Cabotage is the carriage of domestic traffic by foreign airlines. At present, the Government generally permits cabotage only in exceptional circumstances on a case-by-case basis. Some industry participants have suggested that relaxing cabotage rules would increase competition and benefit consumers.

While the Green Paper makes clear that the Government is unlikely to relax the rules or change the current ‘case by case’ approval process, it is seeking submissions on whether it should create (in consultation with industry) a decision-making framework and guide for short term cabotage dispensations.

Monitoring and analysis

The Government is seeking submissions on what types of data and analysis it should produce to support aviation competition.

The ACCC currently monitors prices, financial performance and quality of service at Brisbane, Melbourne (Tullamarine), Perth and Sydney airports. It also monitored domestic air passenger prices, costs and profits from 2020-2023. In its final report on air passenger services, the ACCC recommended that the monitoring be continued past 2023.

The Productivity Commission has also completed 4 reviews into the economic regulation of airports, with the most recent concluding in 2019.

Aviation industry stakeholders should consider what kind of information they think should be made public and subject to Government analysis.

Economic regulation of regional air operations

The Government is considering whether or not to implement a 2019 recommendation of the Senate Rural and Regional Affairs Committee that the Productivity Commission undertake a public inquiry into the determinants of domestic airfares on regional routes. Issues that may be covered include the feasibility and utility of increasing operational subsidies, introducing price control alternatives and the regulation of additional regional routes.

Providers and users of regional air services should consider making a submission on issues affecting the cost of regional air transport.

Disability access

The Disability Royal Commission brought to light the experiences of people living with disability who engage with air transport. These include being denied travel with assistance animals, a lack of accessible flights in regional areas and limited aircraft capacity to accommodate wheelchairs.

The Disability Discrimination Act 1992 includes provisions to ensure the accessibility of public transport and provides a set of Transport Standards which seek to remove discrimination for people with disability.

In the Green Paper, the Government states that it expects the aviation sector will need to:

“…make substantial additional and ongoing investments to make services accessible and legally compliant with human rights obligations, including in relation to: staff training, carriage of assistance animals and mobility aids, the standardisation of processes for carrying lithium-ion wheelchair batteries on aircraft, complaints processes and provision of more accessible formats of communication and information dissemination.”

Submissions are sought on:

  • What further improvements can be made to aviation accessibility regulatory regime, including under the existing Disability Standards for Accessible Public Transport, Disability Access Facilitation Plans and the Aviation Access Forum.
  • The specific challenges faced by people with disability wishing to travel by air.

HWL Ebsworth Lawyers strongly encourages all participants in the aviation industry to make a submission to the Green Paper and have a say in developing Australia’s aviation policy settings and are happy to assist in drafting a response.

Submissions are open to anyone until 30 November 2023.

The Green Paper is available in full here.

For further insight and legal support, please contact Jayne Heatley.

This article was written by Matthew Brooks, Partner, Jayne Heatley, Partner and Richard Davis, Consultant.

1Australian Competition and Consumer Commission (2023) Airline competition in Australia Final Report 

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