Unfair GapsπŸ‡¦πŸ‡Ί Australia

Airlines and Aviation Business Guide

16Documented Cases
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All 16 Documented Cases

Uncompensated Passenger Refund Liability Under Proposed Scheme

Estimated AUD $50–150 per disrupted passenger for mandated care costs (meals ~AUD $30–50, accommodation ~AUD $100–150, rebooking admin ~AUD $20–50). For a major carrier handling ~500 disruptions monthly, this represents AUD $25,000–75,000 monthly exposure once scheme passes.

Airlines operating in Australia currently have discretionary compensation policies with no legal mandate to pay financial compensation for delays/cancellations. The proposed scheme standardizes requirements for care (meals, accommodation, rebooking) similar to EU Regulation 261/2004 (€250–€600 per passenger). Qantas and Virgin Australia have publicly opposed the plan citing increased operational costs.

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Interline Revenue Leakage from Billing Inefficiencies

1–2% of interline revenue per transaction; for a major carrier operating 500+ interline segments weekly at average AUD 150 per segment, this represents approximately AUD 39,000–78,000 annually from proration errors alone.

Interline revenue proration involves splitting fares between multiple carriers on a single ticket according to IATA rules, regional cost factors, and negotiated provisos. Manual calculation of Straight Rate Proration, proviso matching, and ATBP allocation creates systematic errors, missed exceptions, and incomplete billing cycles, leading to revenue leakage when validating carriers fail to bill or incorrectly allocate fares to partner carriers.

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Customer Churn from Inconsistent IROP Rebooking & Care Policies

Estimated AUD 2–5% revenue churn per major disruption event due to customer defection to competitors with clearer policies. For a carrier with AUD $5B annual revenue, this represents AUD $100M–250M loss annually. Manual IROP staff handling (phone calls, rebooking, meal vouchers) costs ~AUD 50–100 per disrupted passenger; for 500+ monthly disruptions = AUD 25,000–50,000 monthly labor overhead.

Search results show different rebooking thresholds: Virgin (2+ hours), Qantas (significant change), Jetstar (3+ hours), Tiger (varies). Passengers navigating these inconsistencies experience friction and negative sentiment. CHOICE consumer advocacy group flagged lack of clarity in earlier draft. Manual negotiation between passengers and agents delays resolution.

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Uncontrolled Revenue Leakage in Passenger Revenue Accounting

LOGIC estimate: 0.5–2% of passenger revenue per airline annually (typical revenue leakage in complex transaction environments). For a medium-sized Australian carrier with AUD 500M annual passenger revenue, this represents AUD 2.5–10M in undetected leakage per year.

Passenger revenue accounting manual processes fail to detect under-collection of fares and taxes in real-time. Systems like SKYfly Revenue and Accelya explicitly highlight capability to detect these gaps, implying current manual processes allow them to persist undetected.

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