Consumer NZ lodges Fair Trading Act complaint against Air New Zealand refund practices

The organisation says Air NZ is ignoring regulations over its refund practices.
The organisation says Air NZ is ignoring regulations over its refund practices. Photo credit: Getty Images/Newshub.

Consumer NZ has lodged a Fair Trading Act complaint with the Commerce Commission against Air New Zealand and its refunding activity during COVID-19.

The complaint relates to accusations that the airline is avoiding paying refunds to passengers whose flights to or from the US have been cancelled due to the pandemic, which would be a breach of US Department of Transportation (DoT) rules.

Consumer NZ chief executive Jon Duffy said flight rules in the US entitled passengers travelling to or from the US to a refund if their flight was cancelled. However, Air NZ was advising customers on some US flights they could only get a credit.

"We've had a steady stream of complaints from consumers who we consider have been given misleading information by Air NZ about their refund rights," Duffy said.

Consumer NZ believes information Air NZ is providing to customers misleads them about their rights to refunds, which is a breach of the Fair Trading Act.

US DoT rules state "any US or foreign airline operating aircraft to, from or within the US must promptly refund passengers on flights cancelled or significantly delayed due to COVID-19."

But documents given to Consumer NZ show Air NZ has been advising passengers these rules "do not apply to flights where the passenger is transiting through the US", meaning they don't apply to anyone who only has a stopover in the United States.

Consumer NZ says this is  inaccurate. 

The DoT told Consumer NZ that the rule "does not exclude a direct flight between two foreign points that has a stop in the United States to pick up new passengers or allow some to disembark".

When Consumer NZ raised the matter with Air NZ, the airline replied saying that it was "seeking clarification" of its obligations. 

Other correspondence from the airline to passengers have stated: 

The rules only apply to US citizens or those who booked through a US website

The airline is only offering refunds under the DoT rules on request, rather than as a general rule

The airline is only offering partial refunds to some passengers booked on flights to and from the US

Consumer NZ has called these statements completely misleading and asks for immediate action by the Commerce Commission.

Due to the uncertainty within the aviation and travel industries and the massive sums of money involved, Consumer NZ is asking the Commerce Commission to consider an urgent injunction to halt Air NZ's conduct.

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