New Zealand’s competition watchdog is taking legal action against Jetstar, the budget airline owned by Qantas, alleging the company misled passengers about their rights to compensation during 2022 and 2023.
The New Zealand Commerce Commission (NZCC) claims that Jetstar likely prevented consumers from seeking compensation they were entitled to and denied legitimate claims, according to a report by Travel Weekly.
“Airlines have a responsibility to not mislead consumers about their rights in the event of cancellations or delays,” said Vanessa Horne, NZCC general manager of Competition, Fair Trading, and Credit.
She emphasised that this applies to flights disrupted due to issues within Jetstar’s control, including mechanical failures.
According to Horne, under the Civil Aviation Act, airlines must reimburse passengers for losses caused by cancellations or delays on domestic flights within the airline’s control. Passengers are entitled to compensation for "reasonable" expenses incurred due to delays, such as meals, accommodation, or other travel-related costs, up to 10 times the ticket price, with a maximum of$11,000.
For international flights, the Montreal Convention outlines passenger rights. Travellers are eligible for compensation unless the airline can demonstrate that it took all reasonable steps to prevent the disruption.
The NZCC accuses Jetstar of making false or misleading statements about passengers’ rights under aviation law during the two-year period, Travel Weekly reported. Horne added that the commission expects large businesses to meet their legal obligations and treat consumers fairly.
Jetstar’s website now allows passengers to resubmit claims for compensation related to delays and cancellations that may have been mishandled. The NZCC encourages affected customers to review their cases on the airline's site. The competition authority plans to file charges in Auckland District Court soon.
This case comes amid heightened scrutiny of consumer rights in the airline industry across the region. The Australian government has announced plans to establish an Aviation Industry Ombudsman Scheme as part of a long-term strategy for the sector. The Ombudsman will have the authority to direct airlines and airports to resolve customer complaints and provide remedies, with penalties for non-compliance, according to Travel Weekly.
Dean Long, CEO of the Australian Travel Industry Association (ATIA), welcomed the introduction of the scheme, calling it a “positive outcome for all travelers.” He noted that many passengers have been left stranded by flight disruptions, with limited options for recourse, Travel Weekly reported. "This new scheme ensures that travellers will no longer face these challenges alone," Long said, adding that ATIA had actively advocated for stronger consumer protections.
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