Senator Bridget McKenzie has accused major airlines of failing to prioritise customers and lacking transparency while advocating for a mandatory compensation scheme for Australian passengers.
The Airline Passenger Protection Bill aims to require airlines to provide refunds or compensation for cancelled or delayed flights, denied boarding for a purchased flight, or lost or damaged luggage.
The government is consulting on an aviation customer rights charter, but there are currently no penalties in Australia for airlines that cancel or delay flights.
McKenzie said the pay on delay scheme is necessary as the Australian public has lost trust in Virgin Australia and Qantas during a Senate committee hearing on Monday.

“You have to be dragged kicking and screaming to do the right thing under the law,” she said, referring to for misleading consumers in October 2024.
The airline was found to have misled consumers by selling tickets to already cancelled flights, that were labelled as ‘ghost flights’.
‘Nobody wants to cancel a flight’
McKenzie questioned Qantas domestic chief executive Markus Svensson about why customers should trust the airline to voluntarily ensure proper treatment of passengers following the ghost flights incident.
In response, Svensson said the airline has several incentives to avoid cancelling or delaying flights, as it is also in the best interest of the passengers.
“That’s not true, Mr Svensson,” McKenzie said.
“Qantas has been taken to court and been found to knowingly sell tickets for flights that don’t exist.”
Svensson said Qantas “always puts the customers first” and, in response to McKenzie’s push on ghost flights, reiterated the airline is incentivised to look after customers.
“Nobody wants to cancel a flight, it’s not good for the customer, it’s not good for operations,” he said.
Stephen Beckett, general manager of government and industry affairs at Virgin Australia, said they have made significant investments in customer service and complaints handling.
“We need to make remedies more accessible to the travelling public,” he said, adding his support for “strengthening” the complaint handling body.
While Beckett did not explicitly endorse or oppose the bill, Svensson said Qantas is “not supportive of any compensation-based scheme”.
‘We’d like to see regional airlines excluded’
Rob Walker, CEO of Regional Aviation Association of Australia, told the committee any legislation should have exemptions for regional airlines that have much tighter profit margins.
“We’d like to see regional airlines excluded from a pay on delay system,” he said.
He, however, expressed support for a carve-out to “protect services” in regional Australia, noting that delays can be beyond any airline’s control, such as issues with the airport, weather, or even passengers.
Mandatory compensation schemes for flyers exist in regions like Europe and Canada, where there are minimum guidelines for refunds and compensation for flight delays and cancellations.