The consumer watchdog is keeping a close eye on airlines as war in the Middle East continues to affect fuel supplies and fares.
The Australian Competition and Consumer Commission (ACCC) says global events mean they are keeping a close eye on the industry: click here to read its latest Domestic Airline Competition report.
“The Middle East plays a critical role in global aviation. We’ve already seen airline operations affected worldwide with potential for impacts to flow into our domestic market,” ACCC Commissioner Anna Brakey says.
“While market conditions ultimately determine the cost of flying, we are closely monitoring price movements, market behaviour and the airlines’ representations to consumers.
“(We) will act if there is behaviour that contravenes competition and consumer laws,” Brakey says.
Air travel to Europe, in particular, has been disrupted by airspace closures, flight cancellations and route diversions amid a flurry of missile and aerial attacks in the Middle East.
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CONSUMER GUARANTEES
The ACCC says a refund for flights cancelled by the war depends on the individual booking; legal consumer guarantees are unlikely to apply if the airline delays or cancels a flight due to a third party such as airspace closure or flight restrictions.
Airlines may be required to provide a remedy if the reason for the delay or cancellation is not due to a third party such as safety failures or natural disaster.
“We have been encouraging consumers with an upcoming international flight to contact their airline to understand their options,” Brakey says.
Airlines and passengers are already feeling the impact of the surge in jet fuel prices, the ACCC says.
“Major Australian airlines typically hedge a proportion of their fuel needs, which helps to insulate them from short-term fuel price movements,” Brakey explains.
“However, if jet fuel prices remain elevated for a prolonged period, airline costs may increase and could ultimately lead to higher domestic airfares.”
The reduction in long-haul flights around the Middle East has shifted passenger demand to hubs in Asia, particularly for routes to Europe.
The ACCC says this high demand is placing inflationary pressure on airfares where capacity is limited.
It says airlines can change prices in response to demand, supply or input costs but can-not mislead about the reasons for the increases.
MORE ACCC NEWS: Airport works may drive fares up
