The lawsuit related to guidance from the airline to consumers about their rights to compensation when flights were delayed or cancelled for reasons within Jetstar’s control.
It emerged after Consumer NZ and Commerce Commission investigations.
Barry said in cases involving critical services, the courts should send a clear deterrent message when companies offended.
“Airline passenger travel is a critical part of the engine of the New Zealand economy.”
Jetstar’s explanation had basically been, “Look, we’ve just been through the Covid period … we were down on staff in our call centre,” he said.
However, one of the misrepresentations involved a generic email sent to customers, which had nothing to do with having fewer call centre agents.
“They were, in fact, trained in a way that led to these misrepresentations being made.”
Another related to OOPE (out-of-pocket expenses) guidance given to customers.
Barry said the difficulties imposed on airlines by the Covid-19 pandemic were not an excuse or explanation for the misleading behaviour.
“It’s a reckless state of mind.”
The starting point for a penalty should be $2.5m, he said.
The airline should get a 25% discount for guilty pleas, and a 10% discount for co-operating.
That would lead to a penalty of $1.625m.
Jetstar: It won’t happen again
Jetstar counsel Joe Edwards said the airline was sorry and had installed new systems to ensure no repeat of the offending.
“Its staff made errors. Its guides and its training documents should have been clearer,” Edwards told the court.
“It has learned its lessons and it has improved significantly. It was never its intention to breach the Fair Trading Act, to mislead customers.”
He said Jetstar had apologised publicly.
“It has high standards. It realises it didn’t meet its own high standards.”
Senior executives had flown over from Australia for the hearing, demonstrating how seriously the airline viewed the situation, he said.
Jetstar had recruited a specialist team to help contact affected customers and offer compensation.
A new team had reviewed 55,000 interactions and identified customers affected by the conduct.
Edwards added: “Systems have been put in place, and this won’t happen again.”
The charity donations had been made in cases where some affected customers could not be tracked down.
The charity’s identity was not disclosed.
“This is not a PR exercise,” Edwards added.
“There was never any intention to make an improper commercial gain.
“There’s no plausible concept that this could be an acceptable cost of doing business,” he said.
“There is inevitably going to be a lot of adverse publicity, which will impact Jetstar.”
He said the airline had no previous criminal record in New Zealand.
Judge Brooke Gibson reserved his decision, meaning he will hand down his sentence and any penalty at a date yet to be confirmed.
John Weekes is a business journalist covering aviation and courts. He has previously covered consumer affairs, crime, politics and courts.
