Covid 19 coronavirus Delta outbreak: Air New Zealand sticks to refund policy

Air New Zealand chief executive Greg Foran says non-refundable tickets are just that. Photo / Mark Mitchell

Air New Zealand, facing another blow with the latest lockdown, is sticking to its policy on non-refundable tickets as Consumer NZ calls for a relaxation of the airline's rules for struggling customers.

Air New Zealand chief executive Greg Foran said non-refundable fares were just that.

''We do offer refundable fares and people do buy refundable fares - that's the procedure. We're not trying to be clever on it. I understand Consumer NZ's point of view but I don't agree with it,'' he said.

In spite of travel disruption over the past 18 months, sales of more expensive flexible tickets that were refundable had not gone up significantly.

''Customers are voting and saying they would rather save the money and take the chance. That's the choice they make. There hasn't been a tremendous swing to fully refundable fare options.''

But Consumer NZ chief executive Jon Duffy said it felt like Groundhog Day.

"Our position on Air NZ refunds when lockdowns occur hasn't changed from April last year. Where Air NZ cannot offer the flight due to a Government-imposed lockdown, it is not the fault of the travelling consumer and a refund should be available to that consumer if that is the best option for them."

Currently Air New Zealand will only refund non-refundable fare classes where the traveller can offer evidence of hardship. Foran said millions of dollars had been paid out since the pandemic began.

Duffy said it wasn't known how long this lockdown would last and whether people could be unable to work for a period of time.

"So being able to retrieve funds paid to Air New Zealand (or any provider) for flights that the airline can no longer deliver may help provide some financial certainty for people."

As with previous lockdowns, there will be people who are more than happy to take a credit, knowing that they will be able to travel once the lockdown end.

"The point is, offering consumers the choice and flexibility to take the option that best fits their personal circumstances, including a refund if they prefer, is just good customer service," Duffy said.

Figures for the past financial year show the extent of liability for unused tickets.

At the start of last year, Air New Zealand had more than $1 billion of revenue in advance - mainly unused tickets - on its balance sheet, although this had fallen to $828 million by June 30 last year.

Duffy said the airline's potential liability for refunds during this level 4 lockdown looked significantly different to what was the case in April 2020, as most bookings were likely to be for domestic travel and only a small amount of international flights.

"In light of this we would encourage Air New Zealand to review its credit-only policy for non-refundable fares and consider doing the right thing for those travellers who would prefer a refund."

Foran said the airline was adding more flexibility for those passengers delaying flying and offering credits without penalties to those with non-refundable tickets.

Air New Zealand is putting on more flights and bigger planes out of Queenstown. Photo / Supplied

Most callers to the airline's busy call centre staff had been understanding and Foran also paid tribute to the airline's frontline and operational staff who were now working frantically to get people home from around the country by Thursday night. Getting passengers from Queenstown to Auckland was a priority because of numbers involved.

Foran said the airline had been preparing for a lockdown for nearly a month and financial modelling had allowed for a hit to domestic operations, on top of disruption to international flying.

"It is what it is and I can't do anything except playing to the conditions we've been dealt - there isn't any point crying over spilt milk, we've just got to get on with it."

Jetstar is today finalising a new schedule, and when it cancels flights it will refund customers if they want. It also offers to rebook on upcoming flights or a credit for a later date.

In other countries airlines have no choice but to refund if they can no longer offer a flight the passenger booked no matter what the reason for the cancellation. Under changes to the Civil Aviation Act, New Zealand could follow other countries such as European Union members which require airlines to refund if they can't offer a service.