Cleared For Takeoff? Tracking Australia’s Proposed Aviation Consumer Protection Reform

This article was co-authored by Natalia Nader, paralegal. 

Welcome to the first in our series of articles on the Aviation Consumer Protection Bill 2026 and its 3 related bills (ACP Bill package), a proposed reform intended to establish a new aviation consumer protection framework in Australia.

Over the coming months, Kennedys will track the ACP Bill package’s progression through Parliament, analyse its implications for airline operators, airports and insurers, and provide timely updates as the framework takes shape.

Overview

On 1 April 2026, the Australian Government introduced the ACP Bill package into the House of Representatives. The principal bill, the Aviation Consumer Protection Bill 2026 (Cth) (Bill), would establish the legislative basis for a new Aviation Consumer Protection Framework (Framework). The proposed reforms are substantial, but many of the operative consumer-facing standards are intended to be set later in subordinate legislation, including the Aviation Consumer Protections Charter.

The ACP Bill package was referred to the Senate Rural and Regional Affairs and Transport Legislation Committee, which is due to report on Friday, 19 June 2026. The Committee’s report may influence whether the legislation proceeds in its current form, is amended, or is delayed pending further consultation. In this first article, we examine the proposed framework, its international context, and several of the legal and commercial issues likely to shape the debate.

Why Reform? Why Now?

The impetus for reform is not new. The 2009 National Aviation White Paper was the first to identify gaps in Australian aviation consumer protection and recommended the establishment of an industry-led dispute resolution body: the Airline Customer Advocate (ACA). The ACA was set up in 2012, funded by the airlines, and participated in by Jetstar, Qantas, and Virgin Australia.

After more than a decade of operation, the 2024 Aviation White Paper: Towards 2050 concluded that the ACA had "not delivered an effective or trusted complaint resolution service", citing excessive findings of ineligible complaints, perceived lack of independence, limited powers, and incomplete coverage of the market. The Australian Government committed, as one of 56 policy initiatives in the 2024 White Paper, to replace the ACA with something that ‘works’.

The ACP Bill package follows earlier public consultation on both primary legislation and subordinate legislation, including the proposed Aviation Consumer Protections Charter. That consultation history matters because, as drafted, the primary legislation establishes the framework, while leaving many of the detailed consumer standards to later instruments.

What the ACP Bill Package Would Do

The ACP Bill package comprises 4 separate bills. The principal legislation, the Bill would establish the Framework and is structured into 8 parts. For present purposes, the most significant elements are the following:

1. The Aviation Consumer Protections Charter (Charter), to be made by the Minister as a legislative instrument, setting minimum standards for airlines and airports across cancellations, delays, baggage, accessibility, and complaint handling. Non-compliance attracts civil penalties of up to AU$ 9,999,000 for body corporates.
2. The Aviation Consumer Protection Authority (ACPA), a regulatory function within the Department of Infrastructure, Transport, Regional Development, Communications and the Arts, with monitoring, investigation, compliance and enforcement powers in relation to the Charter and other statutory requirements.
3. The Aviation Consumer Ombudsperson (ACO), which would oversee an authorised external dispute resolution scheme to handle eligible consumer complaints against regulated entities. Regulated entities would be required to join the scheme. The scheme may make determinations within the limits set by the legislation and the applicable law.
4. The Aircraft Noise Ombudsperson (ANO), a departmental function to review the management of aircraft noise complaints by relevant aircraft noise management agencies.

The International Landscape: Where Does Australia Land?

Aviation consumer protection frameworks have been operating in the EU, UK, and Canada for years. Their experience provides both the model and the cautionary tale for the Australian reform intended by the ACP Bill package.

The European Union and the United Kingdom

The European Union has had Regulation (EC) No 261/2004 (EU261) in force since 2005. It is the most litigated aviation consumer protection instrument thus far, requiring fixed monetary compensation of € 250 to € 600 per passenger for cancellations, long delays, and denied boarding, as well as rights of care and reimbursement. The United Kingdom retained EU261 following Brexit and, from January 2024, has been operating it as assimilated law (UK261), providing compensation of up to £ 520 per passenger.

Canada

Canada operates the closest analogue to the proposed ACP Bill package. Its Air Passenger Protection Regulations (APPRs) came into force between July and December 2019 and are a standards-based framework administered by a specialist transport regulator (the Canadian Transportation Agency) prescribing tiered monetary compensation, minimum treatment standards, rebooking and refund rights, tarmac delay rules, and child seating requirements.

United States

The US takes a more fragmented approach, relying on Department of Transportation enforcement and airline-specific contractual arrangements, rather than a unified compensation regime. The FAA Reauthorisation Act 2024 strengthened refund obligations and civil penalty powers but did not include mandatory delay compensation.

Importantly, the ACP Bill package itself does not specify fixed compensation amounts for delay or cancellation. Much will depend on the eventual content of the Charter and related subordinate legislation, which will determine the practical operation of many of the proposed standards.

Is the Montreal Convention or CACL compatible with the Framework sought to be established by the ACP Bill?

One of the most significant legal questions for aviation clients is whether the proposed Framework will operate compatibly with the Montreal Convention and the Civil Aviation (Carriers’ Liability) Act 1959 (Cth) (CACL). A central issue is Article 29 of the Montreal Convention, which provides that actions for damages arising out of international carriage by air may only be brought subject to the Convention’s conditions and limits of liability. Whether a domestic consumer protection scheme dealing with delays, cancellations or related passenger disruption can coexist with that liability regime will depend on how the Australian framework is ultimately structured and implemented.

For example:

• In the EU, the Court of Justice established in IATA & ELFAA v Department of Transport (2006) that EU261 obligations are regulatory requirements distinct from the individual, fault-based damages claims governed by Article 29. EU261 operates as a standardised, immediate response to a disruption event, not as a private law damages action for loss occasioned by delay. The 2 regimes were considered to operate in parallel, not in conflict.
• In Canada, the Supreme Court reached a similar conclusion in International Air Transport Association v Canadian Transportation Agency (2024 SCC 30) after a unanimous judgment held that the APPRs do not create "actions for damages" within the meaning of Article 29. The APPRs operate as consumer protection obligations that arise automatically from a disruption event within the airline's control, without requiring proof of any individual harm. The distinction between a regulatory consumer protection mechanism and a private law damages action was considered both principled and Convention-compatible.

The ACP Bill package appears to have been drafted with those compatibility issues in mind. Clause 8 addresses the interaction with other laws, including CACL. The Explanatory Memorandum states that the Framework “does not create new private causes of action or alter the operation of international or domestic air carrier liability regimes.” Even so, any definitive assessment of compatibility will depend on the final text of the legislation and, critically, the detailed content of the Charter and related instruments.

International authority from the EU and Canada suggests that a carefully structured regulatory consumer protection regime can coexist with the Convention. That said, the position in Australia should still be expressed with some caution. The legal risk may ultimately prove manageable, but it cannot be assessed fully until the final legislative text and subordinate instruments are available.

Issues emerging from the Committee process

Following the close of submissions on 17 April 2026, the package is now before the Committee, which is due to report on Friday, 19 June 2026.

Publicly available submissions and Parliamentary materials indicate that several themes have emerged:

1. The blank Charter problem: the most fundamental concern is that Parliament is being asked to authorise a framework whose core content, being the minimum standards for cancellations, delays, baggage, and accessibility, is entirely unspecified. The Charter does not accompany the ACP Bill package. The Law Council has recommended that a draft Charter with minimum mandatory content be released before the ACP Bill package is passed. This was standard practice in Canada, where the APPR's core entitlements were specified in regulations tabled with Parliament. Without a draft Charter, the economic impact of the reform cannot be assessed. Both Qantas and Airlines for Australia & New Zealand (A4ANZ) have made this point publicly.
2. Delegation and scrutiny concerns: concerns have been voiced about the ACP Bill package’s reliance on delegated legislation, including broad ministerial exemption powers, the placement of significant matters in subordinate instruments, the abrogation of the privilege against self-incrimination in certain information-gathering provisions, and privacy issues arising from the ombuds framework’s information-handling functions.
3. Regulatory duplication: the ACP Bill package creates 2 dedicated bodies
   (a)  ACPA, providing systematic oversight, compliance and enforcement; and
   (b)  ACO, overseeing the (individual dispute resolution mechanism designed to operate alongside the Australian Competition & Consumer Commission (ACCC), which would retain its existing Australian Consumer Law (ACL) and aviation-specific powers.
   A4ANZ has publicly questioned whether more bureaucracy serves consumers or simply increases airline operating costs. The ACCC's own submission recommended a formal statutory review mechanism to monitor whether this three-regulator model operates effectively.
4. Coverage gaps: concerns have also been raised about the scope of the proposed regime, including whether some airport-related services will fall outside the Framework, whether travel agents and other intermediaries should be brought within scope, and how the compliance burden will affect regional operators and smaller airports. Public materials also indicate that the Australian Government intends to exempt airports with fewer than 1 million passengers per year through subordinate legislation.

Commercial implications

For airlines and airports, the immediate practical impact of the ACP Bill package will depend heavily on the eventual content of the Charter and related subordinate legislation. That uncertainty is commercially significant, because regulated entities cannot undertake meaningful compliance planning, cost modelling or contract review until the relevant standards are settled.

For insurers, the framework raises questions about how Ombuds Scheme determinations may interact with existing airline liability arrangements, particularly those involving the Convention and CACL, including similar individual State/Territory Acts, remain central. The eventual scope of determinations, and the legal character of any monetary relief available under the scheme, are likely to be important issues for coverage analysis.

For all clients, the Committee report that is set to be released on Friday, 19 June 2026 will be the next significant milestone.

We will follow the Committee’s report closely and, once it is released, assess what it means for the ACP Bill package’s likely next steps and the eventual shape of the Australian aviation consumer protection regime.

Originally published 18/06/2026.