Friday, 5 June 2020

New Zealand consumer watchdog hammers Air New Zealand

Consumer watchdog organisation Consumer New Zealand has slammed financially strapped Air New Zealand for its refusal to issue ticket refunds in  the wake of the Covid-19 pandemic. 

Air New Zealand has apologised for not being able to issue refunds across the board and for its much-criticised credit voucher policy.

It has refunded customers whose long-haul flights to destinations including Europe, where where European Union legislation mandates full refunds if requested.

But Consumer New Zealand says the airline is hiding behind what is a weak consumer law to avoid payouts and only offer credits to other ticket holders.

"It was only yesterday that Air New Zealand actually responded to a letter that we wrote to them two weeks ago and it was only yesterday that they came out for the first time with any stance on this issue, other than a couple of media statements that said the law's on their side so they'll do what they want," said Consumer New Zealand CEO Jon Duffy.

"In terms of managing this and meeting the expectations of their customers, they've really failed."

A credit would be acceptable for some people who will keep plans to travel, Duffy said.

"But there would be some people who because of their circumstances will be really doing it tough and really need to get their cash. It's those people who I think Air New Zealand's customers would expect Air New Zealand to at least make some sort of consideration over whether they pay a refund."

Consumer affairs minister Kris Faafoi said the Government would consider changing consumer law in the future to make it easier for affected flyers to get a refund.

"If we refunded everyone that would have a significant impact on our cash flow - it would mean we would move into using the $900 million loan from the Government quicker and I suppose as a consequence of that we would have to make some even more aggressive decisions around our cost base," said chief revenue officer Cam Wallace.

The airline has also been criticised for its lack of transparency on future credits and the inability for people to easily re-book cancelled flights.
"We want to make it right and we want to make it work but we're very, very aware that there is a lot of customer dissatisfaction," Wallace said. "We need to apologise in terms of the way people can use or avail the credits - that has been a disappointment for us and I am deeply sorry for that." 

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