Airline cancelled your flight: refund, credit, or rebook?

Your flight has been cancelled. The airline's app is offering you a travel credit, a rebooking onto a flight that doesn't suit you, or a voucher that expires in twelve months. A cash refund is buried — if it's mentioned at all. This is one of the most common consumer disputes in Australia, and airlines have become very good at steering passengers toward the option that costs the airline the least.

Here is what the law actually gives you, and what to do when the airline tries to offer you less.

Quick answer

When an airline cancels your flight, you are generally entitled to choose between a full cash refund or a rebooking on a comparable service. A travel credit or voucher is only acceptable if you agree to it — the airline cannot force it on you as the only option. Under the Australian Consumer Law, a flight is a service, and services must be delivered with due care and skill and must be fit for the purpose you paid for. A cancelled flight is a failure to deliver the service at all. Whether the ACL applies on top of the airline's own conditions of carriage depends on the circumstances — but in many domestic cancellations, it does.

What the law actually says

The Australian Consumer Law applies to services purchased from businesses operating in Australia. When you buy a domestic flight — or an international flight sold by an Australian business — you are buying a service, and the consumer guarantees in the ACL attach automatically.

The two guarantees most relevant to flight cancellations are:

• Section 60 — Due care and skill. The airline must perform the service with the care and skill you would reasonably expect. Failing to operate the flight at all is a failure to perform the service.
• Section 61 — Fit for purpose and result. If you made clear to the airline (or it was obvious from the booking) that you needed to be in a particular place at a particular time, the service must achieve that result.

When a service fails to meet a consumer guarantee, section 267 of the ACL gives you remedies. For a major failure — one where you would not have bought the service had you known about the problem, or where the failure is so significant it defeats the purpose of the contract — you can cancel the contract and demand a refund of the money you paid. For a non-major failure, the supplier gets the chance to fix the problem within a reasonable time. If they don't, you can then seek a refund.

A cancelled flight with no comparable alternative is almost always a major failure. You bought a seat on a specific flight to reach a specific destination at a specific time. If that flight does not operate and the airline cannot get you there in a way that serves your original purpose, the failure is significant.

It is also worth knowing that section 64 of the ACL makes it unlawful for a business to contract out of consumer guarantees. An airline's conditions of carriage — no matter how many pages long — cannot remove your statutory rights. The clause that says the airline's liability is limited to a rebooking or credit is unenforceable to the extent it conflicts with the ACL.

One important nuance: the ACL does not cover every cancellation in the same way. If the cancellation is caused by an event genuinely outside the airline's control — severe weather, a government-imposed airspace closure, a natural disaster — the airline may have a defence on the consumer guarantee claim. However, cancellations due to commercial decisions (low load factors, scheduling changes, aircraft redeployment) do not attract that defence. The airline bears the burden of showing the failure was not its fault.

When this applies (and when it doesn't)

The ACL consumer guarantees apply when:

• You bought your ticket from a business operating in Australia (this includes Australian airlines and overseas airlines selling tickets through Australian websites or agents).
• The flight is domestic, or the ticket was purchased in Australia for an international flight.
• The cancellation is caused by the airline's own operations, scheduling decisions, or maintenance issues.
• You have proof of purchase — a booking confirmation, bank statement, or email receipt.

The picture is more complicated when:

• The cancellation is caused by extraordinary circumstances genuinely outside the airline's control. Even then, you are usually entitled to a refund of the unused portion of the fare — the ACL argument is stronger for operational cancellations, but the airline's own conditions of carriage typically still require a refund for weather cancellations.
• You booked through a third-party travel agent. Your contract may be with the agent, not the airline directly. The agent has their own obligations under the ACL, and you may need to pursue them rather than (or as well as) the airline.
• You bought a non-refundable fare. This affects your contractual rights under the ticket conditions, but it does not remove your ACL rights if the airline cancels — the non-refundable condition applies to change-of-mind cancellations by you, not to the airline failing to operate the service.

The ACL does not apply when:

• You cancelled the flight yourself and are seeking a refund for a non-refundable fare. That is a contractual dispute, not a consumer guarantee claim.
• The flight operated but was delayed. Delays are a separate issue — significant delays may give rise to claims, but the analysis is different from a full cancellation.

What to do today

If your flight has been cancelled and the airline is offering only a credit or voucher, here is the process that works:

1. Do not accept the credit automatically. Many airline apps and websites present the credit as the default option, with rebooking and refund options harder to find. Do not click "accept credit" unless that is genuinely what you want. Once you accept, you may have waived your right to a cash refund.

2. Request a cash refund in writing. Contact the airline by email or through their written complaints process. State clearly: the flight number, the date, the booking reference, and that you are requesting a full cash refund under the Australian Consumer Law consumer guarantees because the service was not delivered. Keep a copy of everything you send.

3. Cite the relevant law. Mention section 267 of the ACL and the fact that a cancelled flight is a major failure of the service. Airlines deal with thousands of complaints; a letter that references the ACL specifically is treated differently from a general complaint.

4. Set a deadline. Give the airline 14 days to respond with a full cash refund. State that if they do not, you will escalate to the relevant regulator and, if necessary, your state consumer tribunal.

5. Document your losses. If the cancellation caused you to incur additional costs — a hotel night, a replacement flight on another carrier, transport costs — keep all receipts. You may be able to claim these as consequential losses under section 267 in addition to the refund.

If drafting the letter feels daunting, fairgo can generate a ready-to-send demand letter in about 90 seconds. Start your letter here — the tool identifies the relevant ACL sections based on what happened and produces a letter you send under your own name.

For a broader look at how consumer guarantees apply to services generally, see our guide to services that go wrong under the ACL.

What if the business refuses

Airlines are large organisations with dedicated customer relations teams trained to push back on refund requests. If the airline refuses or does not respond within your deadline, you have several escalation options:

• Your state or territory Fair Trading body. Each state and territory runs a free conciliation service. They contact the business on your behalf and try to broker a resolution. A full list of contacts is at /agencies. This step is free and often effective — airlines do not enjoy regulatory attention.

• The ACCC. The Australian Competition and Consumer Commission does not handle individual disputes, but it does investigate systemic conduct. If many passengers are being denied refunds, an ACCC complaint contributes to the regulatory picture. File a report at accc.gov.au — but do not rely on this as your primary path to a refund.

• Your state consumer tribunal. If conciliation fails, you can file a claim at NCAT (NSW), VCAT (Victoria), QCAT (Queensland), or the equivalent in your state. Filing fees are modest and you do not need a lawyer. Tribunals have seen airline credit disputes before and are familiar with the ACL arguments. The threat of a tribunal claim, included in your demand letter, often prompts the airline to settle.

• Your credit card provider. If you paid by credit card, a chargeback may be available for services not delivered. This is a separate process from the ACL claim and runs through your bank. It is worth pursuing in parallel, particularly if the airline is unresponsive.

For a step-by-step guide to what happens after a business refuses, see what to do when a business refuses your refund.

Common mistakes

These are the errors that most often cost passengers their refund:

• Accepting the credit before reading the terms. Travel credits often come with expiry dates, blackout periods, and restrictions on routes. Once accepted, they are difficult to convert back to cash. Read the terms before you click anything.

• Assuming non-refundable means no refund ever. A non-refundable fare means the airline does not have to refund you if you cancel. It does not mean the airline can cancel and keep your money. The ACL does not allow that.

• Contacting the airline only by phone. Phone calls are not documented. If the airline later disputes what was agreed, you have no record. Always follow up a phone call with an email summarising what was said.

• Waiting too long. While the ACL does not set a specific time limit for service claims in the same way that a limitation period applies to court actions, delay weakens your position. Act within days of the cancellation, not months.

• Conflating the airline's goodwill policy with your legal rights. Airlines sometimes advertise generous refund policies during disruption events. These are contractual offers, not your ACL rights. If the goodwill policy is less than what the ACL gives you, the ACL prevails.

• Forgetting consequential losses. If the cancellation cost you money beyond the ticket price — a missed prepaid hotel, a connecting flight you had to rebook — these losses may be recoverable. Keep every receipt and include them in your claim from the start.

If you bought your ticket online and are unsure how the ACL applies to online purchases generally, the guide to online purchase rights under the ACL covers the key principles.

Related reading

• Services that go wrong under the ACL — your rights explained
• Business refused your refund? Here's what to do next
• Online purchase rights under the ACL

This article is general information about Australian Consumer Law, not legal advice. The ACL is complex and your situation may have details that change the analysis. For advice on your specific case, see your state's Fair Trading body — full list at /agencies.