Passengers "bumped" from domestic flights or delayed by deliberate overbookings have been urged by a Government minister to seek compensation of up to 10 times their ticket price.
Air New Zealand says overbooking is a standard aviation industry practice because a "significant percentage" of passengers do not turn up for flights.
Consumer Affairs Minister Judith Tizard directed the Ministry of Consumer Affairs to investigate passengers' rights and discovered "good news" for those who checked in on time but were bumped or delayed.
"Under the civil aviation legislation, consumers are entitled to compensation from the airline if they are delayed - unless the delay is caused by factors beyond the airline's control such as weather conditions or safety issues," she said.
"Delay includes being bumped on overbooked flights, and also covers flights that have been delayed or cancelled because of internal airline issues, such as rostering."
Airlines would be liable to pay compensation to passengers of up to 10 times their ticket price or the cost of the delay, whichever was the lesser.
The compensation would cover loss, such as missing a game or a concert, or extra costs, such as meals, taxi fares or missed connections, incurred because of the delays.
Ms Tizard urged passengers who had been bumped to claim compensation from the airline.
"If the airline refused to pay compensation, consumers can take their claim to the Disputes Tribunal."
Ms Tizard also said Air New Zealand and Qantas were referring to out-of-date legislation in the terms and conditions stated on their tickets and websites.
"This may have led consumers to believe they did not have any rights in response to this issue."
She said airlines should clearly state and publicly display their obligations to their passengers, rather than showing only passengers' obligations to the airlines.
One passenger stranded for more than two hours after being bumped from an Air NZ flight last week is seeking compensation of up to $2000 from the airline.
David Small, one of several passengers bumped from flights leaving Christchurch last Tuesday morning, wrote to Air NZ chief executive Rob Fyfe yesterday asking for an explanation and compensation.
Air New Zealand spokeswoman Pam Wong said: "We have a robust compensation programme that complies with consumer regulations."
Qantas did not respond to calls.
Dr Small, a University of Canterbury lecturer, said he missed the morning of an important meeting in Wellington because of the delay.
"I think 10 times the value would be an appropriate amount and enough to stop them behaving like this again," he said yesterday.
"I hope that that would be sufficient punishment that they would think the risk of it happening is not worth the gain that they might potentially get."
He paid $483 for his return fare, and said the airline was "totally unapologetic" about the incident.
He took off at 10.30am, instead of at his original 8.10am flight time.