Australian Competition & Consumer Commission (ACCC) inquiry

Background
Since the beginning of the year the ACCC has received an increasing stream of complaints regarding the frequent flyer programs being offered by the major airlines.

As a result of these complaints the ACCC is seeking to assess whether these frequent flyer programs raise any issues under the Trade Practices Act 1974. In particular, the ACCC is seeking to assess whether there is adequate disclosure of the terms and conditions relating to frequent flyer programs. The most common complaint is that having built up points under a frequent flyer scheme it is actually difficult to receive the benefits because of seat unavailability.

Submissions
At this stage, the ACCC's emphasis is on fact-finding. To assist in this fact-finding process, the ACCC has identified frequentflyer.com.au as being an interested party and has invited us to provide submissions and/or comments on behalf of the consumers (the airlines are well represented !).

Based on feedback received from our viewers, we submitted our comments to the ACCC on 31 January 2001.

Results
On 15 February 2001 we received the following feedback from the ACCC:

"To assist the Commission in its inquiry into frequent flyer programs, throughout January 2001, the Australian Frequent Flyer website collected numerous complaints regarding frequent flyer schemes.

The subject matter of these complaints closely reflected the complaints received by the Commission during the last eighteen months. The complaints indicate consumers are concerned that the promotion of frequent flyer programs focuses on the trips, gifts or special deals a member can obtain, with little mention of the restrictions imposed by the terms and conditions of the schemes.

Broadly, the main issues raised in the complaints included:

• Insufficient disclosure of the limited availability of frequent flyer redemption seats.

• Cancellation of specific offers.

• Excessive wait times experienced on frequent flyer customer service telephone lines.

• Support for frequent flyer programs, attributed by consumers to their flexibility in travel, dates, times and cabin classes.

• The use of blackout periods for flight redemption’s.

• The continuous trend experienced by many consumers of the inability to redeem frequent flyer points on seats/flights.

The substance of these complaints reveals that there are clear advantages in members of frequent flyer programs being better informed, what the schemes actually entail, what the true restrictions and difficulties are, and how to use program benefits to their greatest advantage.

The onus is on the airlines to make consumers aware that maximising the commercial revenue of a flight means that frequent flyer redemption seats will be limited in availability.

It is important that advertised rewards are available, and that the restrictions imposed on the redemption of those rewards are made clear to consumers.

Thank you to all consumers who provided submissions regarding frequent flyer programs. Australian Competition and Consumer Commissionhed"

For further information on the ACCC, please visit  www.accc.gov.au.