Fast-track needed for flight refund rules

Air NZ will only give refunds for cancelled flights if required to by law.

Air NZ plane on runway.

Consumer NZ wants law changes fast-tracked after Air New Zealand has dug in its heels on giving passengers refunds for cancelled flights.

Consumer NZ chief executive Jon Duffy said the organisation met with Air New Zealand today to discuss the airline only providing credits for flights cancelled due to Covid-19.

Mr Duffy said Air New Zealand maintained its position, stating it would only give refunds if required to by law.

“There are many loyal Air New Zealand customers who will be extremely disappointed by the response. The only way to fix the problem is to change the law so consumers aren’t left in this situation again,” he said.

Thousands of Kiwis have been left with credits for cancelled domestic and international flights.

Mr Duffy said Air New Zealand had acknowledged some customers were in genuine financial hardship and says it will provide refunds in these cases.

Consumer NZ has also asked the airline to provide better information on its website about rights to a refund for EU and US flights.

Passengers on Air Zealand flights departing from the EU were entitled to refunds under EU regulations. Passengers on flights to or from the US were also entitled to refunds under US rules.

Air New Zealand agreed to relook at claims from consumers provided incorrect information about their rights to refunds or credits. Consumer NZ will be referring complaints it’s received to Air New Zealand and monitoring the outcomes.

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Member comments

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Alan P.
22 Jun 2020
How long is reasonable to wait?

In November last year we booked to fly to a wedding in the UK in March and to come home via France a month later after visiting Spain (almost a Coronavirus capitals of the World Tour). We booked to travel with Emirates through Helloworld in Rolleston.

Once it was obvious we couldn't travel because of borders being closed we requested a cash refund. We were told it would take 8 weeks, and would cost us $600 for the refund. After 8 weeks had passed we emailed the agent and got a form reply saying how busy they were, and later a response that the delay was out to 12 weeks which should be up now, but we never got a personal response.

According to the Emirates website refunds normally take 20 days but are delayed due to the situation. There's a world of difference between 20 days and a delay due to the situation and 12 weeks. If the agent goes through are we treated as unsecured creditors or can we still ask for a refund from Emirates? It feels like our cash is being sat on at a time we really need it and feels pretty unfair.

Consumer staff
23 Jun 2020
Re: How long is reasonable to wait?

Hi Alan,

Unfortunately, many airlines are taking a considerable amount of time to refund fares. We suggest you get in touch with your travel agent again to find out what’s happening.

As for what happens if the travel agent goes bust, that depends on whether the agent is a member of the Travel Agents Association of New Zealand (TAANZ) and whether the booking has been ticketed. TAANZ will pay up to $250,000 for unticketed bookings if a member agency goes bust. With an unbonded agent, you will have to stand in line as an unsecured creditor. For ticketed bookings paid by credit or debit card, you may be able to request a chargeback through your bank.

Kind regards,
Aneleise - consumer advocate

Rex B.
15 Jun 2020
Air NZ. TAXPAYER LIABILITY

Typical attitude of a quasi government department!
Why do we even have an international airline? Cities with larger populations than NZ's don't have airlines because there are plenty of international airlines around that want the work. Taxpayers don't receive any special benefits from ownership in fact they are a liability which we continually have to bail out.
Or is Air NZ a political ego outlet?
p.s. Here's a thought. The small claims tribunals now cover claims up to $30,000 - (cost up to $180.00) if its more than that claim on each ticket. Worth a go.

Ray M.
13 Jun 2020
What can AirNZ do?

AirNZ is operating under the law we have in place. If they give back all the money the result will either be the taxpayer giving it back or bankruptcy. I think the government has plenty of other places to pour taxpayer cash.
I do think they should offer people the chance to transfer the credit to family and/or add it to AirPoints dollars not just as a single use credit. Making someone who cancelled $000's for a flight to London use it on local flights is nonsendical and wrong.
Retrospective law is not a good idea. It wasn't AirNZ's fault the NZ Government didn't put in the same rules as Europe and the USA.

Alan T.
13 Jun 2020
We got a refund

Our flights to USA were refunded, albeit with a degree of reluctance but very prompt once we engaged with them. As to anothers comment on "buying better insurance" the majority of travel insurance policies have a get out clause for pandemics and government interventions so its only specific jurisdiction laws that protect the consumer eg USA and EU so we should push for better protection in NZ

Lisa M.
13 Jun 2020
Just do what's right

If I cancelled my non refundable flight then I wouldnt expect a refund, but I didnt AirNZ did, yes it was beyond their control but it was beyond mine too. If they can guarantee me the same flight I had paid for then a credit for that would be fine. Same flight, same price. But if not then I expect a refund as they cannot provide me with what I paid for. So they just need to do what is right for their customers and keeping our money is not right. They are not a bank or credit provider they are a service provider, we paid for a service so provide the service I paid for or give me my money back. It really is quite simple.

Darryl D.
13 Jun 2020
Consumer is Grandstanding

Stop pillorying AIR NZ. I had refundable flights and they were refunded. Non-refundable means just that. They were not obliged to give credits but did. Thats good. Many travel companies have done the same. I have credits from a cruise company, from A Canadian rail company, not refunds. I have till end 2021 to use them. Will this work? Who knows? But I knew these were non refundable amounts and am grateful to have the possibility of getting some value from them.

I think Mr Duffy is just trying to build his profile by taking a populist but irresponsible position on this. If he were CEO of Air NZ he would take the same position. If people want refunds in all circumstances, pay the money for a more expensive fare or more comprehensive insurance. Air NZ could be doing a better job of setting out how credits can be claimed but guess what? Just like the rest of us, they didn't know a pandemic was coming. Then, they didn't have to issue credits but did. Give them a chance to sort out the detail and stop grandstanding.

Annette D.
13 Jun 2020
Win a point and lose an airline

Non-refundable tickets are non-refundable. Isn't it that simple?

We have loved cheap fares in recent decades. My wife and I paid $1500 each for discounted flights to Europe in 1980. That was 2 month's salary before tax. Each. You could fly Europe for less than 2 week's equivalent salary before the lockdown. In return, airlines put conditions on the tickets.

If you want your cake and eat it, you may destroy our national airline. The government offered them a ridiculous survival package - check it out again if you've forgotten. I don't think they can afford to be generous to those of you who feel you are part of the entitled generation.

I will be extremely disappointed if Consumer decides to take this up. At least, look into it very thoroughly first. The message can be made clear to consumers - if you want full fare security, buy a more expensive ticket or more comprehensive insurance.

Paul N.
13 Jun 2020
Non Refundable Fares

I believe that if you buy a non refundable fare you should not receive a refund or credit. Most of these fares are cheaper than flexible fares.
What you have purchased is a fare with no insurance.
Buying a refundable you pay more as you are also paying for Insurance on that ticket.
If travelers with non refundable fare gets a refund then that is not fair to travelers who paid the extra for the refundable ticket.
It's not the airlines fault nor the government's fault that travel was canceled.
Sorry if you took the risk to purchase a non refundable ticket.

Robert B.
13 Jun 2020
Flights

We have a return business class ticket to Houston. It is non refundable as the fare was only available online and true it was advertised as non refundable. The event I was going to was cancelled. It looks unlikely it will be held in the coming year and as I am in the vulnerable age group (and my husband is nearly 80) I do not feel inclined to travel to the USA - nor anywhere else. it is a lot of money tied up that we cannot get access to. It was purchased well before Covid was about. It is a lot of flights to use up even going business to Australia several times!

Owen B.
13 Jun 2020
Owen

I understood that AirNZ was bound by USA law, to refund flights into the States. But, I am aware of a family with $60,000 in tickets to Honolulu, awaiting anxiously.

Robin B.
13 Jun 2020
Air NZ flight payments

I feel that all payments to Air NZ should be placed into a travel trust which can't be used by travel companies until needed

Graeme M.
04 Jul 2020
Demanding payment in advance should be made illegal

All the discussion regarding refunds can easily be fixed by the Govt making the demand for payment in advance illegal. We recently booked a trip to europe and included a river boat trip for about $27k - the travel agents (Helloworld) advised that the shipping company required full payment to confirm the booking. I find this a ludicrous demand (although we caved in), the shipping do NOT need our money 9 months in advance other than to use our money to fund there business. This applies to the airlines, your local builder, roofer and all who what to get paid in advance of providing a service with no security whatsoever offered to the customer. I also have huge problem accepting the ridiculous terms of contract that you have no choice but to agree to at booking. They are so long it would take a team of lawyers a week to understand them, so how is any normal person supposed to read and understand what they are demanded to agree to.

Sam M.
13 Jun 2020
Class Action Against Air NZ

I am wondering if class action court case against Air NZ may push things along the right way. Is the Consumer happy to coordinate?

Rex B.
15 Jun 2020
Small claims court

For those owed smaller amounts lodge a claim with the small claims court (cost about $25.00) I dont think Air NZ will bother to defend the claims.

Owen B.
13 Jun 2020
Owen

Emirates are doing the right thing by me and refunding, yet they must dwarf AirNZ in the logistics. AirNZ have just conceded to credit airpoints used to purchase our local flights but that is merely taking from Peter to pay Paul! Neither Quantas nor AirNZ are budging on our transTasman flights. Don't they make good bedfellows?
Jetstar have pulled out of servicing Palmerston Nth and other regionals so unfortunately stuck with our national carrier locally.
Take our shareholding back up to 98% Winston P, and tell the CEO where to go.

Samantha B.
13 Jun 2020
Is the UK part of the EU?

I have a return flight to England and I am not being offered a refund. Do the EU laws apply? I booked the flight last year and I know the UK are still transitioning out. I just wondered what the specifics are on this.

jane p.
12 Jun 2020
It goes from bad to worse

I put a comment on Consumer recently about our experience with Air NZ, which in summary was over an hour waiting on the phone to speak to someone about using our credits, but then finding out that there is the most complicated system one could think of that is being used to manage the credits (the credits do not sit with the person who paid for them, but sit on each booking reference, broken down by individuals on that booking reference and need to be apportioned back to each individual). So the credit for a family member sits across the various bookings that have been made that person is on.

Today I called Air NZ to use the credits to pay for fares that I have a 3 day hold on. However, the call centre people are taking messages for call-backs because they are so overwhelmed with calls (due to the bizarre system being used to store the credits and the numbers of people wanting to use the credits). I am hoping that they call me back before the fare hold runs out.

It would be everyone's best interests, especially Air NZ & the poor people on their call centres, not to mention the customers and owners of the business (us as NZ taxpayers) to release the credits as Airpoints to free up all the resources that are trying to manage this byzantine process. Frustrating for everyone involved. What Air NZ can't afford to do is upset the customers who have loyally booked with them and paid in advance - as noted by others in this forum, the money paid has not been used as intended (to pay airports, in GST/taxes or to run the flights) and so for them to hoard it is completely unreasonable.

Sam M.
11 Jun 2020
Air NZ

As said, there are many Air NZ loyal flyers. For a few years now, I have exclusively flown with Air NZ both domestically and internationally without even a wink..

With about $12k of credit with Air NZ, there is little show of appreciation for customer's loyalty. Shameful and short sighted.

Very likely that we will start to shop around from now on.

Sam

David C.
10 Jun 2020
Shareholding

Given the government has a majority shareholding in Air NZ, it is effectively underwritten by the taxpayer, but apparently isn't prepared to do the right thing by the tax payers who've booked flights. Does it follow natural justice to take Air NZ profits on to the government balance sheet in good times, but allow management to deflect consumer liability when things go bad? Is it time to nationalise the airline to get away from it being driven by shareholder expectations to something that more closely matches New Zealand's practical and ethical requirements? Is a national airline, somewhere as small and constrained New Zealand, more logically a public good, rather than a for-profit enterprise?