Jetstar Fined $1.3M in NZ for Misleading Customers

Jetstar Airways has been fined NZD2.25 million (USD1.3 million) by New Zealand’s Commerce Commission for breaching the Fair Trading Act. The regulator found that between January 2022 and March 2024, the airline misled passengers about their rights to compensation for delays and cancellations within its control.

Under New Zealand’s Civil Aviation Act, airlines must reimburse customers for reasonable expenses caused by disruptions such as staffing shortages or mechanical failures, up to ten times the cost of the original ticket. However, Jetstar was found to have wrongly denied legitimate claims due to flawed internal policies and instructions given to staff.

Vanessa Horne, the commission’s general manager for competition, fair trading, and credit, said the case exposed systemic shortcomings. “Our investigation found these misleading practices were embedded in Jetstar’s processes, allowing staff to wrongly decline compensation. This penalty should serve as a strong deterrent to other major businesses,” she said.

Following enforcement action, Jetstar paid NZD1,039,390 (USD612,000) in compensation to 2,692 affected customers. The commission noted the airline had previously been warned over similar conduct.

In response, Jetstar admitted its mistakes and issued a public apology. “We are deeply sorry for letting our New Zealand customers down during our COVID restart by incorrectly assessing some claims in 2022 and 2023. We know this caused frustration, stress, and financial impact, and we take full responsibility,” the airline said.

The Qantas Group-owned carrier said it has since implemented corrective measures to ensure compliance and prevent future breaches.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com