Air New Zealand says from today it will offer refunds to customers who would have been transiting through the US, including the NZ1 and NZ2 flights between Auckland and London.
It comes after the consumer watchdog this morning said it was lodging a complaint with the Commerce Commission over the airline's ongoing refusal to refund passengers from all its cancelled US flights.
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Under US regulations, passengers on flights to or from the United States, including transiting passengers, are entitled to refunds where flights are cancelled, regardless of the reason.
Consumer NZ said Air New Zealand was still not refunding passengers who were to transit in the US.
"We believe that the legal position is clear here and that these people are entitled to a refund and Air New Zealand is coming out and saying that they are not," the US Department of Transportation had said.
"We believe that Air New Zealand is misleading New Zealanders about their rights, which could be a breach of the Fair Trading Act."
Consumer NZ ultimately wants a law change to bring New Zealand in line with the US, where people are entitled to a refund regardless of whether or not it's the airline's fault.
Consumer Affairs Minister Kris Faafoi has previously acknowledged that New Zealand's laws are out of step with other jurisdictions and that the government would look at amending the Civil Aviation Act.