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Thursday, February 5, 2015

AirAsia in hot water with ACCC over Bali route


CHOICE calls on the ACCC to investigate AirAsia over dodgy ticket sales

CHOICE has written to the ACCC and urged it to investigate AirAsia* after the airline cancelled direct flights from Melbourne to Bali with as little as 24 hours' notice, having sold tickets on a route it did not have permission to fly.

AirAsia X CEO Asran Osman-Rani and Indonesia AirAsia Extra CFO Dendy Kurniawan
launch direct flights to Bali in Melbourne on October 27. (AirAsia X)
“On Christmas Day the airline notified travellers that direct flights from Melbourne to Bali would be cancelled and offered them a 13-hour journey flying via Malaysia instead of the six-hour direct flight advertised by the airline,” says CHOICE head of media Tom Godfrey.

“Most consumers understand that flights can be cancelled and delayed, and are willing to share that risk with airlines. But asking consumers to accept a risk that an airline is not accredited to fly is a step too far.”

“The fact is consumers purchased direct flights to Bali but they ended up being flown around the houses coming in via Malaysia. AirAsia sold one thing and delivered something different – and in the process it misled consumers.”

“It is also highly likely that AirAsia’s decision to cancel the direct flight resulted in consumers’ holiday plans being thrown into disarray with many incurring cancellation costs.”

“If the route alteration had a major impact on holiday plans, where a holiday was the reason the flights were purchased, it constitutes a major failure under Australian Consumer Law (ACL).

“Our consumer protections apply to airlines the same way they apply to other goods and services. While some delays and cancellations are genuinely beyond the control of airlines, they still need to comply with consumer guarantees,” says Mr Godfrey.

“If the airline misled consumers or acted in a way that constitutes a ‘major failure’ under consumer law, consumers should be able to seek compensation from the airline for any unexpected expenses they have had as a result of the cancellation.”

CHOICE has asked the ACCC to:
  • Seek pecuniary penalty against AirAsia for violating s34 of the ACL;
  • Declare that the cancellation of the direct route constitutes a major failure
  • Direct AirAsia to pay affected customers eligible compensation for out-of-pocket expenses, including writing notifications to all affected customers about their rights to claim;
  • Seek fixed sum compensation payment for the failure to provide customer service of an acceptable quality to the affected consumers. This compensation should be in addition to any consequential loss.

CHOICE is unaware of the exact number of consumers who have been affected. However the attractively low price of direct flights to a premiere holiday destination offered for use during the summer holiday season was likely to have caught out a large number.

For more on CHOICE's letter to the ACCC regarding AirAsia visit:

AirAsia is a group of several airlines which operate under the ‘AirAsia’ brand. This complaint relates to Indonesia AirAsia Extra (or ‘Indonesia AirAsia X’). Indonesia AirAsia X is a new airline and the route between Bali and Melbourne was to be the airline’s first and only planned flight. Consumers who flew the diverted route via Malaysia would have flown on another AirAsia affiliate and not Indonesia AirAsia X. 
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