Travel agents get funding to recover Kiwi travellers’ cash

Glimmer of hope for travellers who booked through travel agents.

20sep travel agents get funding hero

Travel agents are getting government funding to help recover the estimated $690 million Kiwis have tied up in overseas bookings cancelled due to Covid-19.

The funding will be available to agents who manage to get refunds or credits for their customers. Thousands of travellers with international trips booked through agents are still waiting to hear what’s happening with their money.

Under the government scheme, an agent will be paid 7.5 percent of the value of any cash refund they secure for customers and five percent of the value of any credit.

If a $10,000 cash refund is obtained, the customer will be refunded that amount and the agent can claim $750 from the government. If the agent gets a $10,000 credit for the customer, the government will pay $500.

The reimbursement scheme is capped at $47.6 million.

If you’re waiting for a full refund or credit from a travel agent, chase them up. We’ve had complaints from frustrated consumers who’ve had to push hard to get their money back.

Minister of Commerce and Consumer Affairs Kris Faafoi said the scheme is intended to “help increase the likelihood of consumers recovering refunds and credits owed to them. It will also give greater confidence to the travel industry by limiting further insolvencies”.

The funding announcement comes after STA Travel was put into voluntary administration in August, owing millions of dollars to creditors.

Consumers owed refunds bySTA are classed as unsecured creditors. If you’re affected by STA’s collapse, you can file a claim with the administrator Deloitte. Contact your bank about a chargeback if you paid for your travel by credit or debit card.

Stay in the know

Keep up-to-date with Consumer's latest news, investigations and product and service reviews, plus join the Consumer panel with invitations to take part in surveys.

Member comments

Get access to comment

Lynette B.
15 Sep 2020
Booked on line

What happens about a refund if I booked on linen the AirNZ website?

Consumer staff
22 Sep 2020
Re: Booked on line

Hi Lynette,

In most cases, Air NZ is only providing credits for cancelled flights but you can get a refund if you bought refundable tickets or if you’re flying particular routes. For more information check out our guide to Air NZ credits and refunds.

Kind regards,
Aneleise - Consumer NZ staff

John W.
13 Sep 2020
Travel agent holding refund

My travel agent advised me they had received my Air NZ refund 7 weeks ago. Despite 3 “reminders” so far, I have still not received those funds.

James C.
12 Sep 2020
Really? How lame.

This seems like another lame Labour party policy. Perhaps not surprising.
It will result in little for the poor Air NZ customer. I would guess that, like me, other Air NZ customers did request a refund via their travel agent. Air NZ simply says NO. Nothing more the travel agent can do; and mine tried twice. Air NZ has about $4k of our money. They simply don't care.
My message to the Government; for too long you have sat on your arses fully aware of what is playing out here. This is not difficult to address. Let's drive real change in this industry and align it to sensible consumer protection and CGA regulations. A customers money should be held in a trust account and only able to be drawn by the airline after that flight has left the ground. Up until that stage the pre-payment is a liability on Air NZ books anyway, i.e. the customer is a creditor until the flight has departed. In no way should the payment in advance of the flight be used as operational expense funds. This would reflect commercial reality.

Steve & Sue G.
14 Sep 2020
Escrow

Totally Agree - let's have all moneys paid to Air NZ in future, held in an Escrow account and only released once the flight has departed. Escrow is common in the USA to prevent situations like this.
What happened to the NZ$900M the government issued to Air NZ as a bail-out anyways - why didn't they make it contingent on refunding fares to passengers?

Amanda K.
12 Sep 2020
Repetitive rebooking & cancellation cycle

We have finally been able to get credits for our transt Air NZ flights that were purely to connect to international flights. My daughter arranged a long weekend stay in Rotorua as a reunion with her high school friends who are scattered around NZ, so she used her credit towards return flights Chch to Rotorua return. The original return flights to Auckland were worth approx $200. The new flights cost $490 with a $50 change fee. A couple of weeks later the flights were cancelled by Air NZ due to the Auckland lockdown so now she has $490 in credit. She is scared to book another flight in case the same happens. With the increased risk of possible see-sawing between making bookings that are repetitively cancelled by Level 3 lockdowns, can something be done to waive the fees each time, so that we can rebook without fear of losing more money each time?
Also, all this talk about travel agents being able to secure refunds on international flights seems a little overly hopeful to me. Is not the ability of each airline to refund people reflected in their individual policies? For example Etihad has a specific policy around holding flights in credit until a year after your original travel date and at that point have promised to refund tickets. So what can a travel agent possibly do to override the airline policy?

James G.
12 Sep 2020
Air New Zealand needs to refund, I am not a bank offering interest free loans!

I will not be able to use the ‘credit’ that Air New Zealand forced upon me. Even if I were able to travel again, the cost of the EXACT same flight is now almost double the original cost.
What Air NZ needs to do is offer the options of:
a FULL REFUND
or a CREDIT EQUAL TO the value of replacement flights (eg, no additional cost to rebook the same route)
or a CREDIT PLUS an additional ‘INTEREST BONUS’’ which becomes refundable after perhaps two years thus allowing the airline to recover and my money isn’t an interest free loan to a corporate!

Let the customers decide which option is best for them, I’m over this corporate bullying.

Hazel K.
12 Sep 2020
AirNZ FARE REFUNDS

Sounds great that Government is offering assistance to travellers who have booked through travel agents. It seems those of us who made arrangements and paid our fares direct to AIRNZ will go begging. My bags were packed and I was ready to go, I didn’t cancel the flight, AIRNZ did!

Sharon W.
12 Sep 2020
Getting Air NZ refunds if paid by credit card

A bit of a long shot, but if Air NZ cancelled your flight and not you, and you paid by credit card, you could try to ask the credit card company for a chargeback for “service not provided”. I am going through that process currently with Amex and hotels.com. You have to be very determined though.

James C.
12 Sep 2020
Follow Sharon's advice IF you paid by credit card

It worked for me. If a merchant fails to provide a service then the credit card company has an obligation to retrieve your money. So if the airline or even the travel agent cancelled your flight you have grounds to request your money back. Just log a case with the bank that issued the credit card. This is a powerful reason to book most costs on a credit card; note that this is not the case for a debit card which provides no protection in this regard.

Steve & Sue G.
14 Sep 2020
How long to contact Credit Card company?

James, any idea how long we'd have to make contact with the CC co? We booked in Jan 2019 to fly out to Oz in March . . . would our time required for us to contact our CC Co regarding this request for a refund, have expired by now? Anyone ?