Cancelled flights costs travel industry hundreds of millions of dollars

flights

The increase in cancelled flights by airlines is costing tourism businesses over $400 million a year, according to research by the Australian Travel Industry Association (ATIA).

Former Qantas economist Tony Webber said the airlines are putting profits over passenger needs, a trait that began during the GFC in 2008.

“They’re cancelling services to make more money essentially, and that one episode proves it,” Dr Webber told News Corp.

“Prior to that, from 2003 to 2008, the cancellation rate was around 1 per cent. When the economic downturn hit, the rate doubled, peaking at 3.6 per cent in June 2008.”

Cancellation rates have increased post pandemic averaging 5 per cent in December.

Dr Webber said the airlines gamed the “80-20 rule” which allows them to keep their timeslots at major airports on the proviso they did not cancel more than one in five flights in the particular slot over a year.

ATIA chief executive Dean Long said the rule was costing the tourism industry hundreds of millions of dollars.

“In the year to October 2023, $405 million in overnight tourism expenditure was lost because of cancelled flights,” said Long.

“It has a huge flow-on impact that damages the overall tourism industry.”

The research found that for each cancelled flight, an average of 5 per cent of passengers decided not to travel at all while those that did had to spend an extra $18.77 an hour.

Long said cancellation rates would likely plummet if airlines were forced to pick up the tab.

“We would call on the government to act on changes to this process outside of the aviation white paper,” he said.

“We cannot wait until the end of the year and into 2025 for reform, and the government needs to act quickly on this and make sure there’s an economic cost to cancelling flights.”