Air New Zealand and Virgin airplanes on tarmac.
Research report
1 May 2020

Covid-19 flight cancellations: Why you should have the right to a refund

If your flight doesn’t leave the tarmac, we think you should be able to get your money back.

In the wake of the Covid-19 pandemic, we’ve been hit with a big jump in complaints about airlines.

As flights were grounded by the lockdown, consumers soon discovered many airlines weren’t providing refunds. Instead, passengers were offered credits, with time frames for use ranging from a few months to two years.

Passengers who booked through a travel agent found some agents intended to charge them a cancellation fee, even though it was the airline that had pulled the plug on the flight.

Many were rightly miffed the airline was holding on to their money, especially as there was no guarantee flights would resume anytime soon. Understandably, the fallout from Covid-19 has also left many consumers reluctant to make travel plans.

The ever-present risk of the airline going under and taking customers’ money with it has added to the uncertainty.

The kicker is that airlines can get away with offering credits because of our weak consumer protection laws for cancelled flights. In short, airlines here aren’t required to provide refunds when flights are cancelled for reasons outside their control.

Compare that with the situation in the EU where passengers are entitled to refunds, regardless of the reason the flight’s cancelled. Even the US requires airlines operating on its turf to provide refunds in these situations.

US lawmakers reasoned it would be “manifestly unfair” for an airline to fail to provide the flight for which it had been paid and then refuse to refund the passenger. We’ve been making the same argument here in an effort to get our laws beefed up.

The aviation industry is facing massive upheaval and some airlines may not survive without government bailouts. But these can’t be grounds for letting airlines retain fares when they haven’t provided any service for your money.

For some passengers, thousands of dollars are involved, at a time when their own finances are under pressure. Instead of getting refunds, they’re effectively being asked to give the industry the use of their money with no guarantee they’ll ever see anything for it.

Minister of Commerce and Consumer Affairs Kris Faafoi has now promised to take a look at the law and acknowledged New Zealand is out of step with other jurisdictions.

All we’re asking for is a fair deal. If the flight you paid for doesn’t leave the tarmac, you should be able to get your money back.

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