Memo to the Travel Industry: Update your Terms & Conditions after COVID-19

Anthony CordatoAnthony Cordato, Principal at Cordato Partners Lawyers, shares an overview of what he will delve into ahead of his upcoming presentation at the Legal Risks & Issues for the Travel & Tourism Industry on Wednesday, 14 October 2020. He explores how travel bans due to COVID-19 have affected consumer’s rights and the travel supplier’s terms and conditions.


This is an introduction to my presentation on Legal Risks & Issues for the Travel & Tourism Industry on 14 October 2020.

My presentation will highlight the deficiencies in the Terms & Conditions used in the travel industry in the light of recent decisions and the COVID-19 pandemic.

The deficiencies are in the cancellation policies (refunds, credit vouchers, re-bookings), changes in itineraries, limiting liability for injuries and death, and why it’s unwise to rely on travel insurance cover.

A good place to start is the COVID-19 travel bans, followed by the ACCC advice on cancellation policies. Then, a quick look at the new cancellation policies adopted by the airlines and cruise lines sets the stage for my presentation.


COVID-19 Travel bans are put into place

As from 18 March 2020, the Australian Government travel advice was raised to its highest level: ‘Do not travel’ (source: Australian Department of Foreign Affairs and Trade). This advice warns Australians not to travel to all overseas destinations because of COVID-19 concerns.

As from 9pm AEDT on Friday, 20 March 2020, Australians returning from overseas are subject to a strict 14 days self-isolation. The borders remain closed to non-citizens and non-residents wanting to visit Australia, unless they are exempted.

Travellers began requesting refunds when their flight, tour or cruise was cancelled because of these travel bans.


The Australian Competition and Consumer Commission (ACCC) Advice

On 18 March 2020, the ACCC issued advice for consumers and businesses on their rights and obligations if a business has to cancel events, flights or travel services or if consumers wish to cancel their travel plans, due to the coronavirus pandemic (COVID-19).

The advice was:

if the event, flight or travel service is cancelled due to government restrictions, consumer rights under the consumer guarantees may be impacted.

In these situations consumers may be entitled to a refund under the terms and conditions of their ticket, or potentially may make a claim under a travel insurance policy.


What does the ACCC expect in a cancellation policy?
  • If your travel is cancelled the ACCC expects that consumers will receive a refund or other remedy, such as a credit note or voucher, in most circumstances.
  • Travel cancellations due to government restrictions do impact your rights under the consumer guarantee provisions of the Australian Consumer Law.


Airline cancellation policies have changed

Australian airlines initially offered flight credits where the airline cancelled or suspended flights for COVID-19 events, treating them according to fare type.

The ACCC threatened legal action against Qantas and Etihad if they did not make it clear to passengers that they were entitled to a refund, no matter what their fare type. The airlines relented.

Qantas changed clause 9.2 of its Conditions of Carriage to read as follows:

Where we make a Significant Change to your flight due to an Event Beyond Our Control, whether you have checked in or not, we will:

  • use reasonable endeavours to rebook you on the next available flight on our services at no additional cost to you
  • alternatively, if we are unable to rebook you on services acceptable to you, we will refund the applicable fare.

Etihad changed Article 9.2 to provide that if Etihad fails to operate a flight reasonably according to schedule, Etihad will, at the consumer’s option, either:

  • provide a refund to the consumer for the unused portion of their fare;
  • fly the consumer to their destination on the earliest available Etihad service, without additional charge; or
  • make arrangements to re-route the consumer to their destination on either an Etihad service or another carrier’s service within a reasonable period of time, and refund the difference in cost if the alternative transport is cheaper.


Cruise Line cancellation policies have become more innovative

Cruise lines have always made it easy for passengers to transfer to another cruise. But in recognition of the increase in volume of requests for refunds caused by COVID-19, cruise lines are giving bonuses to passengers who accept credits or rebook for future cruises (sailings).

Carnival Cruise Lines has this policy:

Below are two options for Guests whose cruise has been canceled to consider, including a bonus value offer. We look forward to welcoming you on board, when the time is right for you.


Are you ready for the presentation?

The presentation on Legal Risks & Issues for the Travel & Tourism Industry will provide guidance upon:

  • how to update cancellation policies, terms and conditions to deal with travel disruptions caused by COVID-19 and other force majeure events;
  • how to make significant changes to itineraries;
  • ways to limit liability for physical injuries, mental distress and breach of contract
  • the limits of / exclusions in travel insurance cover
  • ensuring that the terms and conditions are part of the contract

These case studies will be used to illustrate:

  • Moore v Scenic Tours Pty Ltd [2020] HCA 17
  • Dibbs v Emirates [2015] NSWSC 1332
  • Di Falco v Emirates (No 2) [2019] VSC 654
  • Gibson v Malaysian Airline System Berhad (Settlement Approval) [2019] FCA 1007
  • Work Health Authority v Outback Ballooning Pty Ltd [2019] HCA 2
  • Kalloghlian v Chubb Insurance Company of Australia Ltd [2016] NSWSC 902
  • Australian Competition and Consumer Commission v Jetstar Airways Pty Ltd [2019] FCA 797

Anthony Cordato is a Principal at Cordato Partners Lawyers, a boutique law firm situated in the Sydney CBD. He has been in private practice since 1975 acting for tour operators, travel agents, travel insurance, airlines, hotels, resorts & restaurants and other businesses in different sectors. He’s published numerous articles on a range of legal issues, including travel and tourism law, gaining more than 85,000 reads, and has delivered legal presentations at a number of legal industry events. Connect with Anthony via email or LinkedIn LinkedIn