Thousands of flights have been cancelled due to Covid-19, leading to unhappy customers. Photo / Brett Phibbs
Thousands of flights have been cancelled due to Covid-19, leading to unhappy customers. Photo / Brett Phibbs
Air New Zealand is under pressure to review its hardline refund policy and to clarify how long passengers' credits will be honoured, amid the ongoing uncertainty over international travel.
Consumer NZ says the airline also needs to clarify as soon as possible its stand on extending a booking window toavoid renewed frustration over refunds and credits.
The airline earned the dubious title of the most complained about company to the Commerce Commission last year for one of the worst customer relations crises in its 80-year history.
Air NZ said it had refunded ''several tens of thousands'' of passengers but had no update on extending fare flexibility, instead urging patience from customers.
Some will have tens of thousands of dollars in outstanding travel credits and - unlike many other airlines - Air New Zealand is not making refunds available for all tickets on cancelled flights as of right.
Chief customer and sales officer Leanne Geraghty said it was impossible to predict when borders may be open.
''We recognise that changing circumstances paired with other things needing to line up, whether that's flights, pre-departure testing or managed isolation, can make things tricky,'' she said.
The airline was reviewing new fare flexibility and would release further details ''soon''
Consumer NZ chief executive Jon Duffy said he hoped Air New Zealand had learned from missteps during a ''tumultuous time'' last year for which he would award it two out of 10.
''During the height of the Covid crisis I would give them a two at best but over the second half of 2020 they possibly got themselves back to a five. Frontline staff did a tremendous job - that two rating was down to decisions made around the exec table.''
Duffy said Air New Zealand should as soon as possible make very clear any extension of the rebooking window. The airline said it was close to finalising new dates.
Unlike most other airlines operating here, including Qantas, Air New Zealand did not offer refunds on non-refundable tickets for flights cancelled due to Covid-19. Instead, it offered credits for hundreds of millions of dollars worth of outstanding tickets.
And only after Consumer NZ lodged a complaint with the commission did the airline relent and refunded those tickets covered by United States law which more strongly back fliers.
Air New Zealand says it still makes refunds on compassionate grounds.
Duffy said ''radio silence'' of last year couldn't be repeated.
''It was relatively late in the piece that Air New Zealand started engaging on the comms front. It would be regrettable to see that repeated now where we remain in this uncertain period and we don't know how long it will be for international travel,'' Duffy said.
The Air New Zealand review underway now relates to its customer flexibility policy after March 31.
Nearly all non-refundable domestic and international flights before that date can be rebooked before December 31, and travel must be taken before the end of next year.
Duffy said that the picture for passengers wanting to rebook would not necessarily be any clearer by the end of the year.
''It's really incumbent on Air New Zealand to provide a bit of clarity when it can over whether the expiry date for those credits will be extended. It seems pretty clear in 2021 that international travel is not going to be what it was.''
Thousands of flights have been cancelled due to Covid-19, leading to unhappy customers. Photo / Brett Phibbs
Some will have booked in 2019 and with doubts over long-haul travel well into next year and beyond into 2023, the airline needed to broaden its refund policy.
People may be too old or have become unwell and are unable to travel, said Duffy.
There could also be a scenario where people with tickets died before they could travel, meaning their estate would then have to seek a refund.
''It falls back to Air New Zealand to be proactive in communicating what their plan is and allowing consumers to say that doesn't fit their circumstances. There will be (cases) where a refund is appropriate to allow the parties to go their separate ways,'' said Duffy.
But Geraghty said refunds during the past six months had already been given for reasons of financial hardship, age, medical reasons or other compassionate grounds.
''Customers who are experiencing changes in circumstances or hardship can still apply for compassionate consideration.''
As at June 30 last year Air New Zealand's revenue in advance - money for tickets that haven't been used - stood at $828 million. The airline warned last year that if it had to repay all fares it's financial position could be jeopardised.
Duffy said it was widely understood the position of all airlines was precarious.
''Let's acknowledge it's been a hell of a ride for Air New Zealand.''
In normal circumstances airlines can have use of a passenger's money up to a year before providing a service - the flight - but in some cases this was stretching well beyond this during the pandemic.
''Keep in mind it's been an interest-free loan for more than a year now - if circumstances have genuinely changed I would hope they would consider a refund. That money hasn't been available (to customers) for a considerable period.''
Before Covid work was being done to bring parts of New Zealand's Civil Aviation Act into line with that in Europe for domestic air travel, where flight cancellations result in refunds or rescheduled flights.
''The law could change on Air New Zealand during this period when they're sitting on all this credit. The credit is currently there and the flight can't be taken so the point when the law comes into effect means it may not need to apply retrospectively.''
