Tribunal Rules That Air New Zealand Must Refund Cancelled flights
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An out of pocket Air New Zealand passenger has had a significant win against the Kiwi airline. The passenger took Air New Zealand to that country’s Disputes Tribunal after the airline refused to pay out over canceled flights. This was despite the passenger being legally entitled to a refund. Fed up, the passenger took the matter to the Tribunal. The Disputes Tribunal found in the passenger’s favor and has ordered Air New Zealand to pay up.
The passenger had four flights between Auckland and Kerikeri booked over June and a return flight to Nuie booked in July. The first flight was canceled for operational reasons. The remaining flights were canceled or changed as Air New Zealand adjusted its schedules. The airline offered the passenger the chance to fly on different services, but that did not suit. Instead, the passenger wanted their money back, NZD$1699. However, Air New Zealand refused.
Air New Zealand argued cancelations were beyond its control
Section 15.1 of Air New Zealand’s conditions of carriage discusses when a passenger is eligible for a refund. It lists a variety of scenarios and says passengers “may be eligible for a refund or partial refund if you purchased a ticket.” Note the word “may.”
New Zealand media is reporting that the passenger was entitled to a refund. But Air New Zealand’s wording in its terms and conditions suggests any refund is at the airline’s discretion.
However, New Zealand’s consumer law does say a passenger is entitled to a refund if the cancellation or delay was the airline’s fault. But, Consumer Protection New Zealand also notes that if shutdown for travel is government-mandated, airlines are not responsible for providing a resolution or alternate plan for the continuation of your journey.
Air New Zealand subsequently argued the canceled flights were beyond their control at the Tribunal hearing due to government-imposed travel bans and border restrictions.
But the Tribunal referee disagreed. In an interesting decision, the referee said flights could have proceeded regardless of travel bans and border restrictions.
“It would not be accurate to state that those flights were canceled due to circumstances beyond Air New Zealand’s control. They were canceled because of operational decisions made by Air New Zealand in response to market conditions,” wrote Nicolas Blake, the Tribunal referee.
The decision to cancel the flight was Air New Zealand’s, and accordingly, they were obliged to pay a refund.
Refusal to pay refunds a PR disaster for Air New Zealand
To date, Air New Zealand have refused to refund non-refundable fare types when flights were canceled. The cash-strapped airline argued to do so would cost it over NZ$100 million. Air New Zealand offered future travel credits instead. Air New Zealand’s hardline stance became a PR disaster for the airline, causing Air New Zealand’s CEO to apologize last month.
Despite apologizing, Air New Zealand hasn’t changed its refund policy on its cheapest nonrefundable ticket types, canceled flights, or not.
“We proactively placed all airfares on canceled flights, including non-refundable airfares that would normally be forfeited, into credit,” says Air New Zealand.
While the Dispute Tribunal’s decision can be appealed, the decision has significant implications for Air New Zealand and its thousands of out-of-pocket passengers, palmed off with unwanted travel credits. Should the decision stand, it could open the door to a wave of refund claims.
Simple Flying has approached Air New Zealand for further comment on the matter.
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