New Zealand's Commerce Commission has fined Jetstar Airways (JQ, Melbourne Airport) NZD2.25 million New Zealand dollars (USD1.3 million) for breaching the country's Fair Trading Act by misleading consumers about their rights to compensation for flight delays and cancellations within its control between January 1, 2022, and March 22, 2024.
The commission stated that Jetstar Airways incorrectly denied legitimate claims for compensation as required under the Civil Aviation Act. The act mandates that airlines reimburse customers for reasonable costs incurred due to delays or cancellations within the airline's control, such as those caused by staffing or mechanical issues, up to ten times the value of the original ticket.
"Our investigation found that the misleading practices were the result of embedded shortcomings in Jetstar's internal policies and instructions, which enabled staff to decline legitimate claims to compensation," said Vanessa Horne, the commission's general manager for competition, fair trading, and credit.
She added that the penalty "should serve as a strong deterrent to other large businesses."
Following the commission's enforcement action, Jetstar has paid NZD1,039,390 (USD612,000) in compensation to 2,692 affected customers. The commission noted it had previously issued compliance advice to Jetstar Airways for similar conduct before the charge period began.
In a public statement, the airline acknowledged its errors, saying it was "deeply sorry for letting our New Zealand customers down during our COVID restart by incorrectly assessing some compensation claims for cancelled flights in 2022 and 2023."
"We know this caused frustration, stress and financial impact, and we take full responsibility for these mistakes," it added.
The carrier, a wholly-owned subsidiary of the Qantas Group, stated it had since implemented corrective measures.
Asked by ch-aviation for comment, Jetstar Airways also highlighted the judge's sentencing remarks, which pointed out "that there is little more that Jetstar can now be expected to do to remedy the matter and remediate the harm done to customers than that which they have already undertaken."
