Consumer NZ wants the Government to stop Air New Zealand crediting its customers.

In many cases reported today on my radio show on NewstalkZB 100.1FM, the airline is refusing to give cash refunds to customers whose flights were cancelled due to Covid-19, instead offering a credit.

Last week, a Consumer NZ survey found 80 percent of passengers on cancelled Air New Zealand flights have been stuck with credits, leaving the airline sitting on millions of dollars of customers’ money.

CEO Jon Duffy told Newstalk ZB, he met with Consumer Affairs Minister Kris Faafoi to discuss the refund issue last night.

Duffy says the minister agreed with his concerns, and says the Government is actively discussing the issues.

He says they’re addressing refund issues, as well as looking at laws, so consumers aren’t left in this position in future.

WHAT DOES AIR NEW ZEALAND SAY?

In a letter to Consumer NZ, dated May 28th, Chief Revenue Office Cam Wallace said COVID-19 “ wrecked financial havoc on the global airline industry and Air New Zealand is no exception.”

“Our ability to connect people and goods around the country, and the world, has been severely disrupted by the pandemic. We regret the enormous disruption this has caused to our customers. It is clear that we will emerge from this crisis as a smaller, domestic-focused airline with limited international services in the near term. Our revenue has also reduced to a fraction of what it was.”

Chief Revenue Office Cam Wallace says “that is why we have embarked on a process of significant cost reduction, leaving no stone unturned when it comes to our fixed and variable costs. Sadly, this has included the painful process of reducing staff numbers by around 4,000.”

“It has been incredibly challenging to see this company celebrate its 80th year with the loss of thousands of staff, the closure of local and offshore offices, the deferral of new aircraft, and huge disruption to our loyal customers. We understand that a number of customers who purchased non-refundable fares would like to receive a refund.”

“Unfortunately, the severity of our situation means we are not able to go beyond the terms and conditions agreed to at the time the fare was purchased, as well as our Conditions of Carriage. For all non-refundable airfares on cancelled flights, we have taken the extraordinary step of pro-actively placing these into credit. We are also enabling customers who have not had their flight cancelled to elect to receive a credit if they do not wish to fly. For customers with a fare credit, we have increased the level of flexibility to use that credit. “

WHAT IS AIR NEW ZEALAND OFFERING NOW?

Air New Zealand says it’s offering customers the option to credit their domestic flights within New Zealand when booked to travel before 30 June, or international flights booked to travel before 31 August 2020.  

The company says if you purchased a non-refundable ticket, it remains non-refundable unless local legislation requires a refund to be made available.

Air New Zealand says it’s extended credit validity. Credits for flights booked to travel between 24 January and 30 June 2020 (domestic flights) or 31 August 2020 (international flights) will now have until 30 June 2021 to redeem this and book new flight/s.

Bookings between New Zealand and Australia must have the credit requested by 30 June 2020 to be eligible: you will have 12 months to complete your travel from the time you make the booking.

Your credit is not restricted to the same route or type of journey that was originally booked.

You can redeem the credit against any available Air New Zealand operated flight, and you will need to pay any fare difference.

Any Airpoints Dollars that were used to pay for the original booking will remain within the credit.

Any Airpoints Dollars used to pay for the original booking that may have since expired or will soon expire will be held in credit and their expiry date extended until 30 June 2021.

Your credit can only be used for the passenger name/s under the original booking

The Airline says while the online confirmation message currently states a date 350 days from the day you requested your credit, we have extended all credits until the 30 June 2021.