Air NZ ‘sitting on passenger cash’

Air New Zealand has millions of dollars of customers’ money in the bank and needs to refund people stuck with credits they don’t want for flights cancelled because of the coronavirus pandemic, Consumer NZ says.

Eighty per cent of passengers were issued credits for cancelled flights, according to a survey of 2138 people by Consumer NZ.

More than $3.8 million had been paid for flights by the 1700 people in the survey given credits, said Consumer NZ chief executive Jon Duffy. Fifty-four per cent had paid more than $1000 for their tickets.

Six per cent of respondents were given refunds for flights affected by the Covid-19 lockdown.

Consumer NZ wanted Air New Zealand to offer refunds to passengers who had asked for them.

‘‘The majority of customers have only been given credits and many didn’t know if or when they’d be able to use them,’’ Duffy said.

The average amount held by the airline per passenger was $2234.

‘‘We’ve heard from a lot of people who really need their money because they’ve lost jobs or income as a result of the fallout from Covid-19. While it’s a tough time to be an airline, it’s also a pretty tough time for many consumers,’’ he said.

Some customers had only been able to get refunds by relying on laws in other countries, such as the United States.

Consumer NZ has been calling for changes to New Zealand’s consumer protection laws regarding airline fares.

After Consumer NZ complained to the Commerce Commission, Air New Zealand agreed to refund all passengers on cancelled US flights.

The US required airlines flying in or out of the country to refund passengers when flights are cancelled, regardless of the reason.

Refund rules also applied to all airlines departing the European Union.

Consumer NZ had asked Air New Zealand to change its position but not yet received a response.

Airlines had to comply with consumer law in New Zealand, but New Zealand was also a signatory to the Montreal convention, which exempted airlines from liability where flights were cancelled for reasons beyond their control.

Air New Zealand has not revealed the value of credits issued to more than 240,000 passengers.