Qantas’ budget airline Jetstar faces legal action in New Zealand over allegations it discouraged thousands of customers from seeking compensation after their flights were cancelled.
The NZ Commerce Commission has flagged its intention to pursue Jetstar in the Auckland District Court over alleged contraventions of the Fair Trading Act, following a similar class action launched in Australia by Echo Law earlier this month.
Jetstar will soon front New Zealand courts over its handling of the COVID-19 pandemic.Credit: Kate Geraghty
Commerce Commission general manager Vanessa Horne said Kiwi customers have rights under international law and the way Jetstar communicated likely discouraged consumers from seeking compensation.
“The Civil Aviation Act is clear that airlines have a responsibility to reimburse customers for loss caused by cancellations or delays on New Zealand domestic flights that are within the airline’s control,” Horne said, adding this also applies to delays caused by staffing or mechanical issues.
“The Commerce Commission expects large businesses to take their responsibilities under the law seriously – they must honour their obligations to consumers,” she said.
Jetstar said it regretted its behaviour and had been reviewing all claims previously lodged to make sure affected customers were correctly compensated.
“We’re deeply sorry to have let our New Zealand customers down by errors made in assessing some compensation claims for disrupted flights in 2022 and 2023, as our operations restarted following COVID,” a Jetstar spokesperson said.
The commission said Jetstar’s website does allow customers to resubmit claims for compensation if they felt their claim was originally mishandled and directed all affected consumers to do so.
“Jetstar likely made false or misleading statements to consumers about their rights in aviation law, in 2022 and 2023,” the Commission added.
Echo Law is also pursuing Qantas in the Federal Court of Victoria despite the airline business waiving the expiry dates of its COVID-19 flight credits more than one year ago. That class action is expected to go to mediation in the coming months.
There is $375 million in COVID-19 flight credits yet to be claimed by Qantas and Jetstar customers as of June 30, down from more than $1 billion accrued between 2020 and 2022.
All Qantas customers may claim a cash refund, while Jetstar customers are limited to a flight voucher.
Disgruntled Virgin Australia passengers, who had their flights cancelled over the same period, have also contacted the law firm, but Echo Law has not launched similar action given the airline entered administration in 2020 and was deemed “a special case”.
Virgin’s COVID-19 flight credits will expire next June.