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No-frills flights shouldn't mean no standards


Publication Date : 14-02-2013


Over the last decade, there have been repeated calls from frustrated travellers for regulation in the low-cost carrier business


Scooting off on a holiday was no fun for thousands of travellers stranded at Changi and other airports in recent weeks.

On January 19, frustrated travellers booked on Scoot kicked up such a fuss that police had to step in.

A faulty emergency slide had meant that seats near the exit of the Singapore Airlines-owned long-haul budget carrier had to be left vacant. It took seven hours before 23 volunteers stepped forward to give up their seats.

Two weeks later, a problem with a fuel tank led to a group of more than 400 Singapore- Qingdao-Shenyang travellers waiting for 15 hours for their flight to take off.

With just four planes and a tight schedule, each delay had a knock-on effect. It took days for Scoot to recover fully. By then, as many as 20 arrivals and departures were late.

Asked to comment on the disruptions, Scoot reiterated that travellers on budget carriers pay low fares so they should not expect meals and accommodation when flights are disrupted.

The terms and conditions which customers must acknowledge they have read and accepted before making their purchase are clear, the airline said. Inconvenienced passengers really should have bought insurance, it added.

In the end, it was Changi Airport Group - the airport, not the airline - that gave out blankets and meal vouchers to passengers stranded overnight in some cases. The only compensation Scoot offered was a S$50 travel voucher to offset against the next new Scoot booking.

The lengthy disruptions reignited debate on whether there should be a set of rules to ensure that airlines meet minimum operational and service standards, with penalties imposed if they don't.

Over the last decade, there have been repeated calls from frustrated travellers for regulation in the low-cost carrier business.

Travellers put up with delays and disruptions, understanding that these are sometimes beyond the control of an airline, especially a low-cost one.

But what if services promised are not delivered? Shouldn't there be a framework for consumers to be compensated?

Another common complaint is that budget carriers take ages to process refunds and reply to e-mails.

One can argue that expecting quick responses and refunds are "extras" in customer service for tightly run, margin-obsessed carriers. But some basic level of customer service must surely be maintained. Like being informed of likely delays, and getting regular updates so they are not left hanging around at the airport not knowing what to expect next. For long delays, food and drinks are essentials.

Airlines should also deploy staff to manage upset travellers instead of leaving it to airport staff or ground handlers to deal with the mess.

Yet the authorities here have shied away from wielding the stick to mandate basic standards of customer service.

Leave it to market forces?

The official view is that in an intensely competitive industry like the airline business, market forces should suffice to motivate airlines to serve their customers well.

It is self-correcting. If service sucks, customers will vote with their feet and switch to another airline. According to this school of thought, regulating airlines and imposing minimum service standards could drive fares up, and not be good for consumers.

But there are good reasons for a serious review of the issue.

In just eight years, the market share of low-cost carriers like Scoot, Tiger Airways, Jetstar and AirAsia at Changi Airport has soared from 5.6 per cent of total passenger traffic in 2005 to more than a quarter last year.

The proportion is set to increase with Asia driving air travel growth, especially on budget airlines. More flights will criss-cross Asian skies. Changi's traffic, which hit a record 51.2 million last year, is set to grow further.

Against such a backdrop, it does not do the airport or Singapore's hub status any good if budget travellers complain of bad treatment and management each time a flight is late or cancelled.

Those who support regulation also note that for many other industries including retail and telecommunications, there are minimum guidelines and service benchmarks that operators must comply with. If they don't, penalties are meted out.

Meanwhile, the Consumer Protection (Fair Trading) Act does not offer any real recourse for aggrieved travellers either, because it kicks in only when a promise made to a consumer is broken.

So while travellers can take a carrier to task if it promises in writing a refund but does not deliver, the Act does not apply for other grievances like waiting for hours without food and drinks for a plane to be fixed.

Better protection elsewhere

In mature markets like Europe, Australia and New Zealand where consumer laws are strict, travellers are better protected.

Within the European Union, for example, a traveller is entitled to compensation which includes cash of up to 600 euros (US$807) when flights are disrupted. Airlines must also provide accommodation when there are overnight delays.

In Asia, regulation is more scarce but things are changing.

In the Philippines, a law has just been passed to hold airlines accountable for operational and service lapses. Indonesian authorities are also contemplating a similar approach.

Passengers' wish list

What should Singapore be doing?

In a competitive industry where profit margins are thin, it is not in Singapore's interest to go the EU way. There, any disruption - whether it is the airline's fault or an act of God - is treated the same.

Excessive regulation with heavy penalties could end up backfiring if it drives carriers away and reduces Singapore's competitiveness as a premier air hub.

Doling out cash for delays is not recommended either, unless it is to refund passengers who cancel their flights. Deciding how much to give, whether more if it is the airline's fault or less if not, can also be a complicated and messy affair.

But there should, at the very least, be clear guidelines on what travellers can expect when there are service disruptions.

Beyond a certain delay period, meal and drink vouchers must be provided. If the delay is overnight, the least carriers must do is offer blankets to those stranded.

Where possible, senior citizens and families with young children should be provided with hotel rooms. Staff must also be on the ground to manage disgruntled travellers and provide regular updates.

Instead of leaving it to the airlines, common guidelines should also be set on the maximum delay tolerable before a traveller can demand a refund. And there should be guidelines on how long he should have to wait before getting his money back.

Regulation need not be limited to just managing flight disruptions. It can go one step further to include regular tracking of airline performance.

What proportion of flights depart and land on time? What is the airline's response time to consumer calls and feedback?

For the stick to work, the Civil Aviation Authority of Singapore, which regulates the industry, and Changi Airport Group must work together.

If the worry is that over-regulation and hefty fines may affect the competitiveness of Singapore carriers, a good middle way to help consumers and punish errant carriers is to make public information on service lapses and operational hiccups easily available.

This will keep airlines on their toes and empower consumers to make the right choices.

Yes, regulation may drive costs up for budget airlines. But as consumers have shown, they are willing to pay a bit more for basic service - be it a confirmed seat or extra baggage allowance.

There is little doubt they will do the same to fly an airline that they know will take good care of them when turbulence hits.


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