Protection boost for air travellers on back burner
Consumer NZ upset to see refund policy gain watered down
New aviation laws have delayed moves to provide better protection for passengers, which has left Consumer NZ puzzled and disappointed. The organisation says refunds as of right for cancelled flights for many reasons, including weather, were available in the United States and Europe and should have been kept within changes to the Civil Aviation Act here.
When it was first unveiled before the pandemic, the legislation was promoted as a way of building in more consumer protection. However, this part of it has been watered down as it moved through committee stages.
Consumer NZ chief executive Jon Duffy said there were strong arguments from other submitters to support his organisation’s stand; if an airline cancels a flight they should automatically offer a refund or a credit no matter what the fare type.
“I’m at a loss. I can only surmise that other elements of the bill took precedent.”
Refunds for disrupted travel were back in the spotlight these school holidays when Jetstar and Air New Zealand passengers complained they would have to wait weeks to get their money back on cancelled flights or being told they are only eligible for a credit.
Airlines, airports and their suppliers are struggling with staff illness and finding enough workers to get equipment back in operation.
Although Air New Zealand has temporarily reinstated its no questions Covid-19 credit policy, which has been praised by Consumer NZ, the organisation wants law changes to better safeguard passenger rights permanently.
In Europe if your flight is cancelled the airline must give you a refund or reschedule the flight, even if it means using a different carrier. Passengers are also entitled to extra compensation and accommodation expenses, if necessary.
In the US the Department of Transport says a consumer is entitled to a refund if the airline cancelled a flight, regardless of the reason.
In New Zealand an airline must compensate you if a domestic flight is cancelled for reasons within its control, such as crew shortages but weather, which is not in the airline’s control, means the airline is not obligated to offer compensation although they typically rebook passengers on later flights — if available — or offer a credit.
It therefore relies on the goodwill of an airline to rebook or credit a passenger and Duffy says passengers are bearing the risk.
Transport and Infrastructure committee chair Greg O’connor said changes were made to the exposure draft to support greater disclosure of airlines’ responsibilities to their passengers.
However, changes to laws around refunds would take more time.
“Consumer protection regulations in this area are very complex, and the advice we received was that further work and engagement with stakeholders needed to take place before further changes around refunds for consumers could be made.”
Transport Minister Michael Wood has said when considering whether additional consumer protections were required, the Government looked at the existing protections that are available now, and balanced the impact that new protections may have on airlines.
But Duffy said there are international regimes to follow with templates available to follow from Europe and the United States, even though countries there like New Zealand were signatories to the Montreal Convention which says weather events aren’t an airline’s problem.
He said the EU and the US had carved that part out of their own
domestic laws. And he said the committee appeared to be treating greater consumer protection as a sideline issue.
“That’s cold comfort for consumers, who yet again are bearing the brunt of this.”
Air New Zealand has previously said it is facing more frequent weather disruptions.
In a submission on the bill late last year, Consumer NZ said it essentially allowed carriers to avoid liability for damages where delay is caused by something outside the airline’s control such as bad weather, pandemic or a government order.
However, because another clause states the section does not limit or affect the liability of a carrier under other law, it means a consumer has a right to compensation under the Consumer Guarantees Act.
Duffy said not every consumer would want a cheque straight away.
“This isn’t a case of wanting to produce a windfall for consumers. We just want a level playing field.”
This bill repeals and replaces the Civil Aviation Act 1990 and the Airport Authorities Act 1966 with a single statute covering safety, security, and economic regulation of aviation. It is set to be passed into law later this year.