Air NZ to disclose airpoints exposure

By CHRIS DANIELS

Air New Zealand's corporate accounts will for the first time include the extent of its airpoints liability when they are released next week.

The airline yesterday announced changes to its airpoints scheme which it hopes will reduce its airpoint liabilities by up to 20 per cent by the end of the next financial year.

Its policy is aimed at simplifying the whole structure of the scheme and to make it easier for people to redeem them.

Company chief operating officer Andrew Miller said the airline's unredeemed airpoint liability would be reduced next year when the first tranche of airpoints - unredeemed after five years - expired.

Miller said the airline would not let these airpoints expire without trying to contact the people who had earned them, saying it was a situation that could be seen as a marketing opportunity.

The company would disclose its airpoint liability in dollar terms, but it is expected this will be in the annual results next week.

Airlines around the world have been criticised recently for failing to properly account for the liabilities incurred in the form of airpoints.

This lack of transparency has led to speculation that financial liabilities of many billions of dollars may not be properly accounted for.

Criticism of airlines has also centred around the difficulties encountered by passengers wanting to redeem the points for travel.

Airlines have been accused of deliberately reducing the number of airpoint seats on popular flights and understaffing call centres, keeping potential passengers on hold for lengthy periods.

Along with the simplified redemption plans announced yesterday, the airline is promising that an average of 15 per cent of all seats across the network will be available for airpoints redemption.

* Air New Zealand's arch rival Qantas yesterday tried to upstage the airline's airpoints announcement by issuing details of new fares matching the low fares revealed by Air New Zealand last month. They match the lowest Air New Zealand offers, but airpoints can still be earned on these cheap deals.

Andrew Miller yesterday said this response from Qantas, which has 22 per cent of the New Zealand domestic aviation market, was expected. He would not comment on whether this meant talks between Qantas and Air New Zealand, centred around the Australian carrier's desire to buy a stake in the airline, had ended.