Buyer beware on Middle East flights, ACCC warns

“The Middle East plays a critical role in global aviation, and we’ve already seen airline operations affected worldwide, with potential for impacts to flow into our domestic market,” said ACCC commissioner Anna Brakey.

According to the ACCC, Australia’s consumer guarantees may not apply if flights are delayed or cancelled due to the actions of a third party, including government flight restrictions or airspace closures, and refund entitlements in those cases would depend on booking terms and conditions.

“However, airlines may still be required to provide a remedy under the consumer guarantees if the reason for the delay or cancellation is not due to the actions of a third party, such as the failure to meet safety standards or a natural disaster,” it added.

The loss of capacity through Gulf states like Qatar and the UAE has led to increased demand in Asia, particularly on services to Europe, which is placing upward pressure on airfares.

Brakey said the ACCC has been “encouraging consumers with an upcoming international flight to contact their airline to understand their options”.

“While market conditions will ultimately determine the cost of flying, we are closely monitoring price movements, market behaviour and the airlines’ representations to consumers, and will act if there is behaviour that contravenes competition and consumer laws,” she said.

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Another key factor affecting airfares is the price of jet fuel, which has skyrocketed since the conflict began due in part to Iran’s effective closure of the Strait of Hormuz, which handles 20 per cent of global oil traffic. Both Qantas and Virgin Australia have increased airfares due to the higher costs.

“Major Australian airlines typically hedge a proportion of their fuel needs, which helps to insulate them from short-term fuel price movements,” Brakey said.

“However, if jet fuel prices remain elevated for a prolonged period, airline costs may increase and this could ultimately lead to higher domestic airfares.”

In a memo to staff this week, seen by The Australian, Qantas chief executive Vanessa Hudson said the Flying Kangaroo has “not had to cancel a single flight due to fuel supply concerns”, despite other carriers such as United Airlines and Air New Zealand being forced to cut services.

“We have increased fares in response to the increased operating costs and will continue to look at ways to further mitigate those cost increases,” she wrote.

“I know right across the business everyone remains particularly focused on costs including our pilots, who continue to have an ongoing focus on managing fuel efficiency.”

Speaking to ABC’s Insiders on Sunday, Energy Minister Chris Bowen said Australia currently has around 30 days of jet fuel, as well as 30 days of diesel and 38 days of petrol.

“While we’ve released more from the strategic reserve, the ships continue to arrive in good numbers, and both our refineries are working absolutely full pelt, and they’re both entirely 100 per cent dedicated to Australian suppliers, not exports,” he said.

Gulf airlines including Emirates, Etihad and Qatar Airways are continuing to operate to limited schedules as the conflict continues.