Air NZ faces probe over how it sells insurance with airfares

Air New Zealand logo on an aircraft.

Air New Zealand is being investigated over possible misleading or deceptive conduct in the way it sells insurance with air fares.

The Commerce Commission says the probe under the Fair Trading Act relates to "opt-out" insurance sold when customers book through the airline's website or mobile app.

Air New Zealand charges $10 per sector on domestic flights for insurance, unless passengers untick the option at stages through the booking.

The practice has led to at least one complaint to the commission. Air NZ also charges for selecting seats as customers book and, like other airlines, charges credit card fees.

A commission spokeswoman said insurance was the focus of the investigation and it was not looking at any other aspects of Air NZ pricing.

"Over the past couple of years we have received 8 complaints about Air New Zealand insurance offer on an opt-out basis. Our investigation has been going for about a year," she said.

The commission was not treating it as "drip pricing" where a company advertises a low price and consumers later learn of unavoidable surcharges or add-on fees.

An Air NZ spokeswoman said the airline and the commission have been in a "constructive discussion" over the past year as to whether an offer pre-selected but able to be de-selected was misleading. "With at least three clear opportunities to opt-out in the online booking process, a large majority of customers consciously do so."

Travel Agents Association chief executive Andrew Olsen said the airline's website was probably clearly enough signposted.

Air NZ was fined $600,000 in 2006 for failing to disclose details of extra charges in ads. Grant Bradley