The Commerce Commission has decided to investigate allegations made by Consumer NZ that Jetstar has misled customers about their rights when their flights are delayed or cancelled.
Consumer NZ complained to the competition watchdog earlier this month that the Australian-owned airline had breached the Fair Trading Act by misleading passengers about their rights under the Civil Aviation Act.
Consumer NZ chief executive Jon Duffy said that when flights were delayed or cancelled for a reason deemed within an airline’s control – such as overbooking, mechanical issues or staff sickness – it should reimburse costs that passengers incurred as a direct result, as well as refund their fares.
Those costs could potentially include the extra cost of replacement flights, accommodation costs and rental car fees, spokesperson Jessica Walker said.
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* Jetstar was warned last year by Commerce Commission of possible law breach
* Consumer NZ: Jetstar ‘misleading passengers’ about rights when flights are cancelled
* Consumer NZ campaigns for airlines to be upfront about passenger rights when flights are cancelled
Duffy said “part of the issue is that Jetstar is claiming its liability is limited when consumers could be entitled to more”.
Jetstar had responded that the claims made by Consumer NZ were wrong.
Hamish McNeilly/Stuff
The competition watchdog’s latest investigation will look at whether Jetstar has misled consumers about its liabilities when flights are changed or cancelled.
But the Commerce Commission, which had been assessing Consumer NZ’s complaint, announced on Friday that it had decided to launch an investigation.
Jetstar said in a statement that it took its obligations to comply with the Fair Trading Act extremely seriously and would fully cooperate with any requests for information made by the Commerce Commission.
“For many years, we’ve had specific information about the Civil Aviation Act on our website and we regularly review the information provided to our customers. Following a recent review of that information, we have updated our website to provide further clarity for customers claiming out-of-pocket expenses during disruptions,” its statement said.
The commission revealed earlier this month that it had issued a warning to Jetstar last year after a previous investigation.
It told Jetstar in a “compliance advice letter” that the airline might have breached the Fair Trading Act by not adequately explaining people’s right to cash refunds for flights that it cancelled in August and September 2020 after social distancing rules were introduced on flights in the wake of Auckland’s Delta outbreak.
The commission said that, in its view, the airline did not adequately make clear that passengers were entitled to refunds, and not just credit in the form of vouchers.
The letter did not point out that passengers might also have been entitled to the reimbursement of costs.
Commerce Commission fair trading manager Vanessa Horne said the letter made clear that Jetstar “must not mislead consumers about their rights and as an airline this would include consumers’ rights as set out in the relevant Conditions of Carriage and, where applicable, the Civil Aviation Act”.
But she said the commission did not include advice about how to comply with the Civil Aviation Act “as that is not a law that the commission enforces”.
The commission received separate complaints about flight cancellations made by Jetstar in July 2020, when passengers accused the airline of cancelling cheap bookings they had made and then advertising new flights with higher fares.
Horne said it assessed those complaints but did not include them in its earlier investigation.
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