Air New Zealand fronts up over $100 million refund problem

Refunding everyone who has a booking would cost Air New Zealand “close to $100 million” right now, according to an airline executive in an interview with Fair Go which aired tonight.

Your playlist will load after this ad

Fair Go spoke with officials at the national carrier to see what they had to say to the fed up Kiwis. Source: Fair Go

“Undoubtedly, it would be a much more simple process for us, but we're trying to survive as an airline,” says Air NZ chief revenue officer Cam Wallace.

Mr Wallace says hundreds of thousands of passengers with non-refundable fares have been offered credits with the airline.

The man in charge of the books also revealed he doesn’t know the total value of those credits because the number rises and falls daily.

Air New Zealand is cancelling international flights 14 days before they are due to fly – in other words, if you had paid to go overseas in July you may still be a question mark on the airline’s books.

The true cost of refunds for all could be many hundreds of millions of dollars.

Your playlist will load after this ad

Many were given credits instead of refunds for flights cancelled by Covid-19, then had trouble using the credits. Source: 1 NEWS

Mr Wallace confirms contact centre staff can grant refunds on compassionate grounds. So far, they have done so for just a fraction of those offered credits.

“We've got a number of customers who’ve had changed financial circumstances. Where people can no longer travel - they may have lost their jobs, there might be a number of reasons - we've refunded about 2-and-a-half thousand of those special cases,” says Mr Wallace.

He’s also cleared up confusion reported to Fair Go by viewers and airline customers.

• They can make a claim for any taxes back and will have these refunded, with the balance still available as an Air NZ credit.

• Any flight leaving from an airport in the European Union would be subject to EU rules - meaning that leg home as far as the next airport on the journey would also be fully refundable, with the rest of the flight held in credit at Air NZ.

• Extras such as upgrades, extra legroom or flash Air NZ features such as SkyCouch will also be credited back. Some customers say they had been told those were just gone, non-refundable.

• A new system will be ready in July so passengers with credits can see what they have and use it online, easing pressure on call centre staff.

Your playlist will load after this ad

Cam Wallace, chief revenue officer, says the airline is working on a solution to make things right for its customers. Source: 1 NEWS

Mr Wallace claims average call waiting times some days are now 22 minutes, but demand can surge quickly with any new development and blow out past an hour and a half or more as customers hit the phones, and it is worse at the weekends.

Mr Wallace says the biggest blow to changing that was learning a week ago that the company couldn’t reconfigure its Airpoints loyalty system to create a new Covid Airpoints Dollar and convert credits into that online system.

“That was our preferred course of action and that was pretty disappointing when we found that we couldn't. It’s complex because of our systems but it's also complex, because of the tax implications,” Mr Wallace told Fair Go.

That will leave many frustrated customers phoning in for another month at least, fuming that the airline is treating them like “a bank” and using New Zealand’s consumer-unfriendly aviation law as “a hideyhole”, according to one unhappy customer.

Mr Wallace has a simple plea: “We are sorry. Bear with us, please.”