New Zealand’s competition watchdog is filing charges against Qantas’ low-cost airline Jetstar, alleging the airline misled consumers about their rights to compensation in 2022 and 2023.

As well as claiming Jetstar “likely” misled consumers from seeking the compensation they were entitled to, the New Zealand Commerce Commission (NZCC) said that Jetstar “likely denied legitimate claims”.

“Airlines have a responsibility to not mislead consumers about their rights in the event of cancellations or delays,” NZCC general manager of Competition, Fair Trading, and Credit, Vanessa Horne said.

This includes flights that were cancelled or delayed due to reasons within Jeststar’s control as well as those that include mechanical issues

“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 continued.

In situations such as these customers are entitled to be reimbursed for “reasonable” costs caused by the delay which includes meals, accommodation and any other costs the consumer may incur getting to their destination. This is up to 10 times the price of the ticket. The maximum set by the Commission is NZ$11,000.

“The Montreal Convention sets out consumers’ rights when travelling internationally, and consumers are entitled to reimbursements for costs incurred from delays and cancellations unless the airlines did all they could reasonably do to prevent the disruption,” Horne said.

In the watchdog’s opinion, Jetstar likely made false or misleading statements to consumers about their rights in aviation law, in 2022 and 2023.

“The Commerce Commission expects large businesses to take their responsibilities under the law seriously – they must honour their obligations to consumers,”  Horne said.

Currently Jetstar’s website allows consumers to resubmit claims for compensation for reasonable costs from cancelled or delayed flights which may have been incorrectly handled at the time, the NZCC said. They encouraged any consumers who think they may be eligible to visit Jetstar’s website.

The NZCC will be filing charges in the Auckland District Court shortly.

Consumer rights are a big focus of the Australian government’s white paper

The news comes as the Australian government is also taking a look at consumer rights within the airline industry.

As outlined in the recently released white paper which outlines the plans for the airline industry until 2050, the government will introduce an Aviation Industry Ombuds Scheme. The scheme will have the power to direct airlines and airports to provide remedies to consumers and investigate customer complaints about airlines’ and airports’ conduct, with penalties for non-compliance.

Australian Travel Industry Association CEO, Dean Long welcomed the news of the Ombuds Scheme at the time, saying it would help stranded passengers receive resources.

“This is a positive outcome for all travellers,” he said. “The establishment of the Aviation Industry Ombuds Scheme is a crucial step forward in protecting consumer rights, ensuring that airlines and airports meet their obligations.

“Too many Australians have been left stranded when flights are cancelled or delayed, with little recourse. This new scheme ensures that travellers will no longer face these challenges alone. ATIA is proud to have played a role in advocating for these essential protections for travellers.”

Feature image: Jetstar plane