Airlines said to be out of kilter with the new consumer laws

13 November 2011 - 02:27 By MEGAN POWER

AIRLINES in South Africa stand accused of flouting new consumer laws, risking multimillion-rand fines.

AIRLINES in South Africa stand accused of flouting new consumer laws, risking multimillion-rand fines.

Following complaints, the National Consumer Protection Commission analysed airline contracts and found most terms and conditions in breach of the Consumer Protection Act.

Violations included:

  • Non-refundable tickets. The act says a consumer has a right to cancel an advance reservation, booking or order. The ticket is the consumer's property and redeemable within three years;
  • Validity of airline tickets, ranging from three months to two years. The act says a prepaid certificate, card, credit, voucher or similar device does not expire before three years.
  • Over-selling and over-booking. The act says a consumer must be refunded the amount paid with interest and compensated for costs directly incidental to the airline's breach of contract.
  • Apart from the consumer's rights to refund, there is no liability to the consumer for any loss or expense. Over and above the refund, the airlines must pay interest from payment to refund date, and cover incidental costs
  • Airlines paying compensation for lost luggage "in line with international conventions". The act says contracts must be in plain, understandable language.
  • Refunds must be made within 15 days.

Airlines have until December 2 to respond.

Commissioner Mamodupi Mohlala said on Friday airlines could sign consent agreements specifying a timeline within which they would amend their terms and conditions to comply.

"The second possible outcome is that of a compliance order, which puts them on terms and also specifies a fine that will be applicable," Mohlala said.

SAA referred queries to the Airlines Association of Southern Africa to respond on its behalf.

Its chief operating officer Vees Lochan said compliance was a priority for airlines before the act came into force. The commission's release of information alleging non-compliance with provisions seemed contrary to the industry's "constructive engagement" with the commission.

Comair, which manages British Airways and, said some of the act's requirements were "not compatible" with the local and international airline business model.

Joint CE Gidon Novick said: "To align consumer rights with this business model, Comair and other SA airlines are deeply committed to the development of an Airline Industry Code ... which will balance airline business requirements with fairness to the consumer and achieve broad compliance."

He said airlines were holding back on rules changes until the code was developed. He blamed the delay on pending permission from the Competition Commission, allowing airlines to jointly consult.

Mango spokesman Hein Kaiser said the low-cost aviation business model worldwide did not allow for refundable ticket sales as such additional overhead costs make low-cost travel "unsustainable". It also did not allow for flexibility on tickets or future expiry.

Kaiser said if a guest was inconvenienced, it had procedures to deal with it. But allowances for refunds, interest payments and other incidental costs would negatively affect the price of an airline ticket.