Air New Zealand rolls out new credit system: 'We have to get this right'

Customers can use international credits on domestic flights and for other passengers. Photo / Mitchell.

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The heat is on Air New Zealand to get its new customer DIY digital system right.

The airline's online credit redemption tool is now live, allowing passengers who hold credit directly with the airline to manage their credit online.

It has been softly launched to hundreds of thousands of customers after months of the airline's reputation taking a battering as it hung tough for its financial survival and stuck to the letter of the law on refunds. As bad publicity piled up it increased the number of fares it paid back on compassionate grounds though.

One big beef was not being able to get through to the airline. Some passengers with thousands of dollars worth of fares had no idea what had become of them leaving them feeling anything from perplexed to furious.

Air New Zealand hopes the new system - accessible through its website - will solve or at least ease this.

Within the first hour of the system going live close to $50,000 worth of travel was booked with credits from some among the 300,000 who had made direct bookings with the airline here in New Zealand and are the target of the first part of the system rollout.

They can use credit from an international flight to book a domestic one and vice versa, and the credit owner can choose who the credit is used for. Air New Zealand has also extended the period in which customers can use them.

They have until December 31 next year to book and a further 12 months after booking to travel.

Air New Zealand's chief commercial and customer officer Cam Wallace. Photo / Jason Oxenham

Those who made bookings through agents will get their turn within the next few weeks as a targeted system is rolled out for the travel industry and then those who booked while overseas will be able to re-arrange their travel.

The system will be further developed to cope with complexity.

At this stage, the online tool can only process credit from single bookings but the airline is working on extending this so credit from multiple flights can be combined and used. In the meantime, customers with multiple flights will still need to call our contact centre.

Air New Zealand was broken new ground with the technology it had to build from the ground up. Airline booking systems can cope with several flights being grounded by weather or a volcanic eruption but the Covid-caused breakdown of the entire international aviation system was new territory.

The airline's chief commercial and customer officer Cam Wallace knew full well the depth of feeling about the credits after fronting the issue.

''It has undoubtedly taken some time and we just want to thank our customers for their patience. But we're, delighted and relieved to get it out into the marketplace,''
he said.

The airline's corporate reputation took a hammering in an Opinion Compare survey last month but Wallace says it has plenty of support.

''I think our brand is very resilient. New Zealanders want us to succeed. We have customers with alot of patience which we've appreciated and we've also had customers who have been frustrated and we acknowledge and apologise for that.''

The booking system was crucial to further recovery.

''We've got to get this right, but we also got to make sure that we are part of this tourism-led recovery so we need to get it right for ourselves and customers but also the industry, frankly.''

A trenchant critic of Air NZ's performance in the past few months, Consumer NZ, welcomes the new system.

''It's good to see Air New Zealand has made some progress to address the customer services issues that have been frustrating many consumers with flight credits,'' said Consumer NZ chief executive Jon Duffy.

He said the ''first draft'' of the tool has some key functionality missing that will continue to frustrate passengers with multiple bookings, or those based overseas.

''We hope Air New Zealand is prioritising delivering a product with full functionality as soon as possible as these shortcomings mean a significant numbers of passengers will remain effected,'' said Duffy.

Impact on demand, prices

While there would be a surge in new bookings on domestic routes, Wallace said the airline's capacity had increased to around 70 per cent of what it was this time last year and that it would cope.

Many of those with international bookings would retain them, now they had two years to take them up.

He said the domestic network rebuild had happened faster then the airline had forecast and airlines around the world were ''astounded'' at the strength of the recovery. Domestic revenue was about a third of the airline's income ordinarily with short-haul international and long-haul another third each.

Air New Zealand has rebuilt its domestic capacity to 70 per cent of last year. Photo / Grant Bradley

There would be some softness following the school holidays and the airline would use ''price as a lever'' to stimulate demand.

''We're not forecasting yield to increase materially because we are trying to grow the network. It's not in our best interest to suppress any demand so we actually are very keen to get airplanes and what we have been because you know we've got the equipment, we've got the staff, and we are looking to grow the business back to what it was.''

Demand was lumpy because international tourists who flew around the country during shoulder seasons were absent.

''We'll see a really fantastic school holiday season but now there'll be weakness as we get back into their day-to-day grind trying to get business traffic back up as well people traveling more over weekends now than during the week.''

Wallace said the outlook for international travel remained stalled although he was hopeful a Cook Islands travel ''air bridge'' could be established soon. It was more likely before any transtasman bubble.

''We've pivoted a bit to the Pacific Islands - that looks more likely probable outcome. So we are working our way through that,'' Wallace said.

• In another sign of travel returning to something like normal, Air New Zealand's popular Koru Hour will be back onboard the airline's domestic jet flights from today.

The airline has been working with its partners and suppliers to bring the service back on its evening jet services after it was suspended in response to Covid-19.

At fixed times complimentary wine or beer, along with some cheese are served in addition to other beverages and snacks and the airline says for customers participating in Dry July, non-alcoholic drinks will be available to enjoy with cheese and crackers.