Air New Zealand apologises over cancelled flight credits

It can't offer refunds to everyone without dipping into its Government loan.
It can't offer refunds to everyone without dipping into its Government loan. Photo credit: Getty.

Air New Zealand says it cannot afford to offer refunds to everyone impacted by flight cancellations during the COVID-19 outbreak without dipping into its $900m Government loan.

The airline has refunded flights to or through the US and anywhere else it will not fly again, like Buenos Aires, but has refused to refund the cost of other tickets, offering credits instead.  

It has faced calls to refund customers, some of whom have found themselves in tight financial situations as a result of the pandemic.

Consumer NZ has repeatedly asked the national carrier to show some fairness and make exceptions to its policy.

Addressing those concerns for the first time today, its chief financial officer Cam Wallace told RNZ Checkpoint's Lisa Owen he was sorry - that the credit system hasn't been more user-friendly.

Wallace said the company would have to dip into its $900 million Government loan to be able to give customers cash refunds, but wanted to improve access to credits, which were being offered instead.

"If we refunded everyone that would have a significant impact on our cash flow - it would mean we would move into using the $900 million loan from the Government quicker and I suppose as a consequence of that we would have to make some even more aggressive decisions around our cost base, what we do with labour, what we do with planes."

The company expected to start to use the Government loan in the next three to six months.

Wallace said 55 people were working on a digital platform which would be released in late July and would allow people to use and see the credits.

"We want people to have the facility so that they can go online so they can see how much they've got ... make a booking using the credits, we understand that it's not smooth, it has been disappointing in terms of the amount of time people have taken to get through."

Air New Zealand had not expected there to be leisure travel allowed in level 2 and that change had a big impact on its timeline in getting the online credit system up and running, he said.

"We need to apologise in terms of the way people can use or avail the credits - that has been a disappointment for us and I am deeply sorry for that.

"We want to make it right and we want to make it work but we're very, very aware that there is a lot of customer dissatisfaction - similarly there are people who are happy to have the credit."

Wallace would not give an exact dollar figure of cancelled airfares, but said it was tens of millions of dollars. 

In April 2019 Air New Zealand flew 1.4 million passengers - this April that dropped to 15,000.

Pre-COVID-19 there were 80 flights a week to Australia - about 22 percent of Air New Zealand's business. Wallace was very confident and motivated by the trans-Tasman bubble.

"We're very mindful that as soon as that decision got made, if it was positive we could deploy our assets quite quickly."