A fine handed to Jetstar for misleading passengers about their rights is one of the largest penalties issued under New Zealand’s Fair Trading Act.
“This is a landmark case. A $2.25 million penalty sends a clear message that airlines cannot mislead passengers and expect to get away with it,” says Consumer NZ chief executive Jon Duffy.
The fine follows a Commerce Commission investigation triggered by numerous complaints, including one put forward by Consumer in October 2022. Jetstar admitted to multiple breaches of the Fair Trading Act after misleading passengers about what they were entitled to when flights were delayed or cancelled for reasons within the airline’s control.
According to the commission, Jetstar misled tens of thousands of consumers about their rights to compensation under the Civil Aviation Act 2023 and their rights to make a claim in the first place.
“This wasn’t just poor service. These were embedded practices that left people out of pocket when the law actually offered them protection,” says Duffy. “Passengers often didn’t know their rights and were actively misled by this conduct.”
Under the Civil Aviation Act, travellers have clear rights when delays or cancellations are within an airline’s control. But currently, airlines are not required to tell passengers about those entitlements. Consumer has long called for this to change.
We met with associate transport minister James Meager last month and urged him to recommend regulations that would require airlines to communicate passengers’ rights clearly. He could do this easily and quickly under existing powers in the Civil Aviation Act.
“We need rules that protect travellers and ensure fair treatment. Without that, airlines profit from passengers’ confusion. There should be no place for that kind of behaviour in a competitive aviation market,” says Duffy.
We acknowledge Jetstar has improved its service since the complaint was filed. The airline has engaged with Consumer and the Commerce Commission, sought advice on complaints, improved communication with passengers and committed to putting things right for affected passengers. As a result, we have noticed a significant reduction in the number of complaints we receive about Jetstar.
“Jetstar has made changes and, in doing so, has shown that, when held accountable, airlines can lift their game. This outcome sets a higher standard for the whole industry and reinforces the fact that doing right by passengers is good for business,” says Duffy.
