Covid 19 coronavirus: Air New Zealand must reimburse passenger for canceled flights – Court of Disputes

Air New Zealand has been ordered to reimburse a customer for canceled flights when the airline decided to cut its own services due to the Covid-19 pandemic.

The case could have implications for thousands of other travelers who were denied refunds by the carrier due to the pandemic.

Demand for the airline’s services dropped sharply when the pandemic hit, and Air New Zealand was forced to cut its flights to save money.

The airline has steadfastly refused to reimburse disgruntled customers for their ground flights, saying that reimbursing each disturbed passenger would further threaten its already shaky financial situation.

But a Northland client managed to get his money back after taking the matter to Dispute Court.

In a recently published decision, the court’s arbitrator, Nicholas Blake, found that the airline was in breach of its own customer guarantee after it canceled the customer’s flights when Covid struck.

The customer, who did not want to be named, had four Air New Zealand flights between Auckland and Kerikeri in June and a return trip to Nuie in July canceled or rearranged because the airline cut services to save money.

The airline cited “operational requirements” as the reason for canceling its first flight in early June, while the second two flights, scheduled to take off in late June and July, were simply “changed.”

He was given the option to fly a different service on each cancellation, but he declined the airline’s offer.

Under Air New Zealand’s conditions of carriage, a passenger is entitled to a refund if they have purchased a ticket and the airline canceled the flight due to something within New Zealand’s control, or if the airline was unable to book the customer on another flight .

Blake found that the customer’s flights were not delayed: they were canceled or continued, but no passengers were allowed to fly the service (as was the case with one of the man’s flights to Nuie), or the flight continued but was unable to board. because his first flight had been canceled.

The customer was entitled to a refund because the changes were operational decisions that were under the control of Air New Zealand and the airline was unable to transfer his flight to another service, because he was not satisfied with the alternative flights offered and did not. accept them.

A lawyer representing Air New Zealand argued that the client’s flights were canceled due to government-imposed travel bans (for example, domestic flights during the level 4 lockdown) and border restrictions.

But Blake found that it was proven that travel bans and restrictions linked to Covid did not affect the ability to travel.

“The flights could have continued,” Blake wrote in his decision.

“The reason they did not proceed is that Air New Zealand made significant operational changes after March 2020 to respond to the drastic drop in demand for flights.

“Those changes were essential to Air New Zealand’s financial survival, and the direct cause of the downfall was the Covid-19 pandemic.

“However, it would not be accurate to say that these flights were canceled due to circumstances beyond Air New Zealand’s control. They were canceled due to operational decisions made by Air New Zealand in response to market conditions.”

On October 23, Blake ordered Air New Zealand to pay a refund of $ 1,699 for the flights.

Air New Zealand has 28 days to appeal the decision and a spokesperson said it was still reviewing its options.

The spokesperson said that Covid-19 had caused a huge disruption and that the company still operated only 5 percent of its international passenger flights because border restrictions were still in place.

“That’s why we proactively place all airfares on canceled flights, including non-refundable airfares that would normally be forfeited, into credit. We also allow customers who did not cancel their flights to opt for a credit.

“More recently, we adjusted our flexibility to give customers the ability to change their flight to a new date or time at no charge, or put their fare on credit for a subsequent trip through March 30, 2021. Customers who choose to put their rate in credit before the end of March 2021 in our national and international network, they will have until the end of December 2021 to reserve with their credit and another 12 months to fly after the reservation date “.

The spokesman said travel to Niue was restricted with flights reduced to once every 15 days for Niue residents and essential services people (who had a letter from the government) only.

The client said that he took his case to the dispute court in principle as much as to get the money back.

“They shouldn’t take people’s money and decide, of their own free will, to cancel events,” he said. “I don’t think they have a leg to stand on. They are canceling flights due to lack of demand, not because of Covid.”

In June, Air New Zealand chief revenue officer Cam Wallace told the Herald that he was “not in the financial position to offer full refunds of non-refundable fares.”

“Providing credit is in line with almost all other airlines and similar businesses and helps ensure that, in the long term, Air New Zealand has sufficient resources to allow us to continue operating.”

The airline warned that despite being able to access a $ 900 million loan from the government agreed in March, its financial future would be jeopardized by repaying tens of millions of dollars in non-refundable fares.

Consumer New Zealand Research Director Jessica Wilson said that while the decision was good news for this customer, the Dispute Court’s orders were unprecedented, so there was no obligation for other arbitrators or courts to rule on the same way.

Wilson also said that in this case, the court determined that the flight changes were within the control of the airline, not caused by the Covid-19 closures, so the airline was required to provide a refund instead of credit.

“In cases where it is the airline that has disconnected, you are entitled to a refund and do not have to accept the [alternative flight],” she said.

Wilson said that taking a case to Dispute Court was certainly something people should consider if they believed they had a strong case where the change or cancellation of the flight was a decision made by the airline and not caused by a Covid lockdown. -19.

Wilson said the massive disruption to airlines caused by Covid-19 added weight to the organization’s call for New Zealand law to align with much more consumer-friendly rules in the European Union and the United States, where airlines are located. required to offer refunds. instead of credits if they cannot provide a service.

In a presentation to the proposed changes to the Civil Aviation Law last year, the Consumer recommended that the passenger rights of domestic airlines be better aligned with the consumer protection provisions in EU regulations where cancellations of Flights, regardless of the cause, result in a rescheduled fare or a refund as well. as compensation when under the control of the airline.

“These requirements ensure that passengers are covered when unforeseen cancellations occur, encourage airlines to avoid delays, and discourage airlines from canceling flights due to factors within their control,” said Consumer.

Due to stricter US laws, anyone flying into that country, or even just in transit, is entitled to refunds from the airlines that operate those flights.