Consumer NZ calls out Air New Zealand over refund practices

Air New Zealand's refusal to provide refunds for cancelled flights may breach Fair Trading Act.

Air NZ plane in flight.

Consumer NZ today lodged a Fair Trading Act complaint with the Commerce Commission about Air New Zealand. The complaint calls on the commission to investigate Air New Zealand’s refusal to provide refunds on all cancelled US flights.

Consumer NZ chief executive Jon Duffy said flight rules in the US entitled passengers travelling to or from the States to a refund if their flight was cancelled. However, Air New Zealand 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 New Zealand about their refund rights.”

Under US regulations, passengers on flights to or from the United States, including transiting passengers, are entitled to refunds where flights are cancelled, regardless of the reason.

Mr Duffy said the US Department of Transportation confirmed to Consumer NZ that passengers have a right to a refund even when they are transiting through the US on their way to another destination.

“We provided this information to Air New Zealand. However, it’s continued to tell customers transiting through US airports they’re not entitled to a refund. Instead, customers are being offered credits. We consider this conduct to be misleading and in breach of the Fair Trading Act. We’re making this complaint because Air New Zealand isn’t doing the right thing for these customers.”

Consumer NZ has asked the commission to take urgent action.

Mr Duffy said the situation highlighted the need for law changes to better protect Kiwi consumers. Rules in both the US and EU entitle passengers to refunds whenever flights are grounded. However, airlines here are only liable when flights are cancelled for reasons within their control.

In response to Consumer NZ’s concerns, the Minister of Commerce and Consumer Affairs Kris Faafoi has recently stated he will review the rules.

View Consumer NZ's complaint to the Commerce Commission here (PDF 183KB).

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Sandra Y.
18 May 2020
Air NZ Refund

We are one of many being refused a refund by Air NZ for our trip to the UK via Los Angeles. To quote from Air NZ's email "Under the US Department of Transportation regulations, rules regarding flight delays and cancellations only apply to flights that operate to, from, or within the United States. As your booking was for travel between Auckland and London, the terms and conditions of the fare apply."

Even though they cannot provide the trip we booked for and are not flying to London any more, they flatly refuse to refund. We support Consumer and its case and will keep our fingers crossed.

Rob
18 May 2020
Air NZ Refund

Regrettably it seems that Air NZ will only give refunds in these circumstances if you telephone them and quote the fact that they are governed by DoT regulations. In our case ($18,000 of credits for Hawaii flights) we were told that the regulations only applied to flights to and from the USA! The person we were dealing with seemed surprised to learn that Hawaii was part of the USA and put us on hold while she went to check. We got the money back individually over 3 weeks — but we got it back!

We passed this information on to a friend who’s husband was flying return to London via Los Angeles and, again with some assertion on her part, she was able to get a full refund.

I want to record my thanks to Jessica Wilson for her help with this matter.

Rob Crozier
Life Member