Jetstar Faces Penalties for Misleading New Zealand Passengers

Budget airline Jetstar has issued an apology to its New Zealand customers after admitting to misleading them regarding their rights to compensation for delayed or cancelled flights. The airline’s acknowledgment follows a court case initiated by the Commerce Commission, which contended that Jetstar had actively discouraged consumers from pursuing rightful compensation.

The Auckland District Court held a hearing where representatives from both Jetstar and the Commerce Commission appeared. Judge Gibson has reserved his decision on sentencing for a later date. The Commission described Jetstar’s actions as not merely careless but reckless, stating that the airline continued its misleading practices despite prior warnings and similar charges from the Australian Competition and Consumer Commission in 2018.

During the proceedings, Jetstar’s lawyer, Joe Edwards, emphasized that the airline had demonstrated remorse and had taken steps to address previous customer claims. As of March 2023, Jetstar had refunded approximately $843,000 to affected passengers, a figure that has reportedly exceeded $1 million in subsequent months.

Financial Implications and Apology

Both parties have agreed upon a starting penalty of $2.5 million, with an additional 25% increase to reflect Jetstar’s financial circumstances. Judge Gibson will later determine the extent of any discounts applicable to the fine.

In a written statement, Jetstar expressed regret for its handling of compensation claims during its Covid-19 recovery phase. The airline acknowledged, “We are 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.” Jetstar recognized that these errors resulted in frustration, stress, and financial impacts for affected customers, taking full responsibility for the situation.

The airline further indicated that in the past two years, its staff had reviewed thousands of claims and reached out to customers impacted by these misjudgments. They added, “For anyone who still feels they may not have received the correct compensation for a past flight disruption in Aotearoa, please get in touch with us here so we can review your case.”

Commitment to Improvement

Jetstar has stated that it is implementing significant changes to prevent similar issues from arising in the future. These changes include updating its website and communications to clarify New Zealand customer rights, enhancing staff training, and strengthening the claims review process. The airline aims to restore trust among its customers while ensuring transparency in its operations going forward.