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28 May 2020

Air NZ sitting on millions of dollars from cancelled flights

Just six percent of Air New Zealand customers in our survey had been given refunds for cancelled flights.

A Consumer NZ survey found 80% of passengers on cancelled Air New Zealand flights have been stuck with credits, leaving the airline sitting on millions of dollars of customers’ money.

Consumer NZ chief executive Jon Duffy said only six percent of the more than 2000 Air New Zealand customers who participated in its survey had been given refunds after flights were cancelled due to the Covid-19 lockdown.

“The majority of customers have only been given credits and many didn’t know if or when they’d be able to use them,” he said.

More than $3.8 million had been paid for flights by the 1700 people in the survey who had been given credits.

Fifty-four percent had paid more than $1000 for their tickets. Mr Duffy said this money was locked up in Air New Zealand’s bank account. The average amount held by the airline per passenger was $2234.

Consumer NZ is calling on the airline to do the right thing and offer refunds to those who want them.

“We’ve heard from a lot of people who really need their money because they’ve lost jobs or income as a result of the fallout from Covid-19. While it’s a tough time to be an airline, it’s also a pretty tough time for many consumers,” Mr Duffy said.

Mr Duffy said passengers were being short-changed by the airline and outdated consumer protection laws.

Some customers had only been able to get refunds by relying on laws in other countries. Last week, as a result of a Consumer NZ complaint to the Commerce Commission, Air New Zealand backed down and agreed to provide refunds to all passengers on cancelled US flights. The US requires airlines flying in or out of the country to refund passengers when flights are cancelled, regardless of the reason.

“Air New Zealand is operating two different refund policies. It’s prepared to provide refunds for cancelled US flights but many other loyal customers are out of luck and only get a credit.”

Consumer NZ has written to Air New Zealand chief executive Greg Foran, asking the airline to change its stance but is yet to receive a response to its request.

Our survey

A total of 2138 people took part in Consumer NZ’s survey on cancelled Air NZ flights:

  • 80% had been given credits
  • 6% had been given refunds
  • 14% were still waiting to hear what they would receive.

The survey was carried out online on Consumer NZ’s website.

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