Tuesday, December 11, 2012

Open Post: Airline Cancellation Fees...double dipping & revenue raising?

Dear Mr Joyce,

Corporations never cease to astonish.

For me, international work and family commitments mean international flight commitments, and occasionally the 'best laid schemes of mice and men' require some alteration, often understandably incurring some form of 'alteration' costs. But nothing prepared me for the quote I received yesterday as a result of my proposed flight rescheduling requirements.

With nary a thought to excessive fees about to storm onto my horizon, I rang Best Flights to inform the agent that my partner and I would not be requiring the seats between Geneva and London in February 2013...stuff had happened...blah blah blah...have had to detour to Paris...blah blah blah...still need seats on London to Sydney leg though...

Silly me...I thought I was doing you all a favour somewhat akin to letting box offices know when you can't make a play or concert so that vacant seats can be on-sold...after all such a shame if someone should miss out just because a 'no-show-er' couldn't be arsed to communicate!

I had no expectation of a refund...I was just making a quick courtesy call to let you know that the seats were back in the system again and available to others.

So imagine my shock to be informed that to 'Not Travel' to London from Geneva (that's right; to not board your plane, to not sit in your airline seats, to not eat your airline food and to not drink your airline beverages) was going to cost the 2 of us...


...for not going to London from Geneva!


At best you will on sell...and at worst if those seats for that short leg are not taken you won't have missed out on the fares because I have already paid for them and am not seeking a refund. You stand to gain if you re-sell and there is a good chance that you will (resell, that is).

Anyhoo, back to what happened next.

Given that your airline is the main carrier for our whole round the world journey (well a carrier of sorts because actually British Airways seems to be doing most of the scheduled trip), I gave you a call yesterday and expressed my displeasure at the quoted rescheduling costs which clearly are a question of either double dipping or more disquietingly, planned airline revenue raising.

Unsurprisingly your representative on behalf of you and the rest of Qantas claimed you could do nothing more except murmur sweet 'we know how you feel' (no you jolly well do not!), 'we understand how this looks' (really? something about it then), 'but you need to understand our position' (no I don't and I won't). Then your representative on behalf of you and the rest of Qantas suggested perhaps I should give Best Flights another call and ask them for a complete breakdown of costs - thank you for that, Mr Joyce & the rest of Qantas...

I did and here's how it works

$100 x 2 (Qantas change charge) = $200

$55 x 2 (Best Flights change charge) = $110

$1,668 x 2 (additional airfares & taxes) = $3,336

In a nutshell these fees are verging on daylight robbery. How on earth did you come up with these them? Does it really cost $3,646 to cancel two 'Geneva-to-London' seat reservations? Or is this yet another example of corporate 'gold-plating'? charge it just because you can and no-one ever argues with you, well, not satisfactorily anyway.

Upon reflection it would not be unreasonable for the 'Man on the Bondi Tram' to think that this cancellation/reissue lark has become something of a business itself - an extremely lucrative billion dollar one for airlines - other people have certainly suggested so, and in fact Christopher Elliott goes on to explain in his blog that:

'...airline insiders acknowledge that the fees more than cover their revenue dilution...and admit that change fees aren’t just a significant revenue source for the major airlines...these companies have built their business models around them and similar fees, such as luggage fees and other ancillary charges. In short, the fees are a source of major profit....and the airline industry is hooked...'

In 2007 I had a similar dispute with Air Canada and I pointed out to them then, as I'll point out to you now, that penalties in Australia are unenforceable at law

From Christopher Elliott's blog I also gleaned that not all major airlines have the same modus operandi as you and the rest of Qantas. Apparently one major airline, Southwest, has elected not to charge any alteration fees and 'still manages to run a profitable business.' As a representative of their company explained, by opting to develop consumer-friendly policies, their unusual airline strategies have brought new customers to them, customers who had thought they were being 'dealt with unfairly by another airline.' This action alone appears to have 'increased Southwest's profits' - maybe something worth considering yourself, Mr Joyce?

Anyway to conclude, I am appalled that I am to be stung with such a penalty when we all know (the figurative 'we' being you, the rest of Qantas, Best Flights, and me) that the cost of making actual changes to reservations and flight schedules is minuscule compared to the exorbitant alteration costs meted out to me on this occasion. You reschedule and/or cancel flights all the time but the minute we need a couple of minor alterations (alterations that in the scheme of things won't affect anyone unlike most of your unforeseen alterations) we get slugged well and truly with hefty penalties. This is grossly unfair and I object to being so penalised.

You and the rest of Qantas ought only to be able to recoup the costs of the action of me cancelling the Geneva to London leg and not to profit from exorbitant penalty fees. As David Koch cited ages ago in an article published by The Age:

' is a well-established legal principle [in Australia] that a contractual term which requires one party to a contract to pay the other innocent party a sum of money upon a default or break of the contract is enforceable only if it provides for payment of a sum of money that is a genuine pre-estimate of the loss or damage suffered by the innocent party...sometimes called a 'liquidated damages' be distinguished from a 'penalty' term, which seeks to not compensate the innocent party but to penalise the other party for the break or default.'

In view of all of this, Mr Joyce, I think the 'take-home' message is quite clear that penalty terms such as yours and the rest of Qantas' are quite unpalatable.

Look forward to hearing from you soon.

Kind regards,
Cranky Qantas Passenger


  1. I'm guessing a London-Sydney ticket costs $1668 more than Geneva-London-Sydney???
    This is similar to the geographical turf wars and manipulation that music, TV, movie, book publishers indulge in. It makes them look stupid and greedy. Then they get all butthurt and sad when their customers despise them.
    I suppose if you tell them nothing and just turn up in London you would be told they cancelled your London-Sydney because you were a no show in Geneva?
    How about fly Geneva-London as booked then scoot back to gay Paris on the train? It would be less than $1668 by train to Paris wouldn't it?

  2. No Sue - you aren't cranky . .. you are simply pointing out the truth . . . what a criminal charge for you simply helping them out!! Maybe you just shouldn't have showed at either airport and then all would be good ??

    I refuse to fly QANTAS due to poor service and inflexibility . . .. I have enough FFs to take a RTW ticket but they make it so hard to find flights . . . as soon as I can use my FFs I will burn them completely!!

    I wish you luck making these twits realise their errors . .

  3. Thanks, Steve & Jamie, for your supportive comments...blogging seems to have done the trick!!! (see update -

    Not flying to London suddenly got a whole lot cheaper!!!!!