Opinion: Why Air New Zealand credit holders need to look to a refund

OPINION:

Air New Zealand is making it easier to get refunds – and anyone with money tied up with the airline would be well advised to give it a go.

Last year the airline cited financial hardship for not refunding hundreds of millions of dollars of travel, saying if it did so it faced theprospect of going under.It was them (the airline) or you (customers).

Last week it announced it was setting up a “dedicated team” to consider refunds.

And while it says it’s not a situation where it can freely refund everybody’s tickets,chief sales and customer officer Leanne Geraghty said on National Radio it would not require documentation to claim a credit.

As at June 30 last year the airline had $726 million in passenger revenue in advance – fares it had collected but hadn’t provided the service for. Some customers will have paid for flights well over 12 months ago – a long time to fork out what could have been thousands of dollars and get nothing for it.

Compassionate refunds are for those people who are unable to travel in the near future because of ill health, being incapacitated or the category that makes the door wide open -financial hardship.

Financial hardship is relative and very specific to different people. For some it’s the difference between upgrading their European car or appliances, for some it’s their kids’ school or university fees and for others paying the power bill on time.

Air New Zealand on Friday provided little information on refunds.

A spokeswoman said it couldn’t divulge the refund dollar figures.

“However, what I can tell you is that about a third of our customers have used their credits to book new tickets.”

Consumer NZ says while there doesn’t appear to be much of a change in policy, if it was lowering the bar that is a good thing.It could be a step in developing a policy where all customers get refunds when their travel plans are affected by an event out of their control like a pandemic or natural disaster, as is the case in other countries.

“Having noted that this is a good development, it is a shame Air New Zealand hasn’t set this team up earlier. It would have been particularly useful around in May and June 2020,” Consumer NZ chief executive Jon Duffy said.

It was then the airline burned up mountains of goodwill with its poor handling of the refund and credit issue and put its hard-working frontline staff under intense pressure.

Most passengers with credits will still want to avoid the hassle of claiming a refund and now, as travel opportunities open up, they have more of a chance of using them.

But others will seek their money back and now have an opportunity to spend it on flying internationally with other airlines if they want to travel.

The opening of a two-way transtasman bubble means the return of competitor airlines Qantas and Jetstar and those bruised by their experience with Air New Zealand will be tempted by the Australian group, which has plenty of idle planes to point our way.

Between them the Qantas group airlines will operate 122 flights a week, 83 per cent of pre-Covid capacity, and new routes between Auckland and the Gold Coast and Cairns.

Many Qantas flights would use passenger friendly wide-body Airbus A330s while Jetstar has dropped fares below $200 one-way (and below $150 for club members) on some transtasman routes.

Qantas hammered out a domestic codeshare deal with Air New Zealand in 2018 but the promised keen competition on the Tasman has gone into hyper drive as Australian airlines reach into their Kiwi rival’s home patch.

While dwarfed by Air New Zealand’s Airpoints scheme on this side of the Tasman, Qantas has hundreds of thousands of loyalty members here and last month pushed further into this market, partnering with AA Smartfuel.

Surprisingly, another Air New Zealand competitor, Virgin Australia, has delayed its return to the Tasman until September-October, missing out on the surge of friends and family wanting to re-unite.But it will be more competition further down the track and that is great news for consumers.

The announcement of the new approach to refunds came hours before a date was fixed on the two-way transtasman bubble – great news for Air New Zealand and a marker post in its move from the survival to the revival part of its recovery.

It also came the same week that the Government extended by $600 million the $900m loan to the airline and delivered a stern finger wagging to the airline to act as a good corporate citizen.Making it easier to get a refund would count as good behaviour.

While the outlook for Air New Zealand and aviation looks much brighter than 12 months ago in an increasingly vaccinated world, those passengers who still have money with the airline need to also consider this rosier picture could change quickly.

We’re constantly reminded of how tricky this virus is and rather than holding out for the hope of long-haul travel any time soon, some customers will be tempted to seek a refund from Air New Zealand.

If you need the money, you’d be a mug not to give it a go.

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