NZ News
My flight has been cancelled: What are my rights?
Air New Zealand is warning 44,000 passengers will be affected by cancellations over the coming months – so what are your rights if you’re one of them?
Air New Zealand chief executive Nikhil Ravishankar told Morning Report between now and the end of April, early May the airline will cancel around 1100 flights.
The airline is facing massive cost pressures, with the conflict in the Middle East increasing the price of jet fuel.
On the No Stupid Questions podcast this week, we talked to Consumer NZ spokesperson Jessica Walker about travellers’ rights if their travel is cancelled.
She said the first thing people potentially affected should do was to check with their airline or travel agent.
“The most important thing you can do if you’re due to travel is just keep looking at the airline’s website.
“Make sure that you’re registered, maybe on their app or that they’ve got up-to-date contact details for you… it might be that you look like you’re all set to fly …and then you find out with a few hours’ notice that actually that’s not going to be the case.
“So, knowing what’s happening is really important.”
From there, people could work out their rights, she said.
Generally, if flights are cancelled because of conflict – for example where war closes an airspace – then airlines are not required to offer passengers a refund.
But Walker said when a flight was cancelled because of the surge in fuel prices, it could be argued that was not a direct result of war.
She said Consumer’s legal team said that fuel price volatility was likely to be viewed as a business cost that could have been hedged and not an unavoidable operational disruption.
“It’s great to see that people are being rebooked, but there are going to be people for whom rebooking doesn’t work. Our stance is they should be able to get their money back and any additional costs should be reimbursed as well.”
That could be to the limits in the Civil Aviation Act, which allow people to claim the lesser of up to 10 times the cost of the ticket for the actual cost of the delay.
But in cases where flights were cancelled directly because of the conflict, that would not apply.
Jessica Walker. Photo: Supplied / Consumer NZ
Travel insurance might not help. Insurance and Financial Services Ombudsman Karen Stevens said policies would generally not cover in situations where travel was disrupted due to war. It would also not help when people had changed their minds.
“When it comes to travel insurance, claims arising from war hostilities or military actions, so exactly what’s happening here, often the policy is going to have exclusions in place so that you don’t have coverage for anything,” Walker said.
“We have been told that there are cases where there is some cover available, but that would be for claims that are not related to the conflict itself. So for example, say you’ve got travel insurance and you’re to get sick while you’re away, or your bag gets stolen while you’re at the railway station for example, then providing those losses are not related to the conflict, then some policies will still cover you for that.”
Walker also warned people to take care with accepting credits for travel they could not use. Airlines have already announced fare increases.
“It is highly unlikely that flight prices are going to go down. So if you’re getting credited for a flight that you decide not to take or could you get to that destination for the same price? It’s looking unlikely, especially with what’s happening with fuel prices… there are already reports of tickets absolutely skyrocketing.
“So I’d say that’s something for people to just keep in mind that with those credits, it’s not going to be a great situation for a lot of people looking to get to the same destination in the future.”
‘Pragmatic response’
David Coombes, CEO of House of Travel, said Air NZ’s decision was “a pragmatic response to the reality of the conflict in the Middle East and the restricted flow of oil through the Strait of Hormuz”.
“We’ve seen the price of jet fuel double because a fifth of the world’s oil and natural gas is currently restricted at the source. When an airline’s main operational cost increases that quickly, it forces an adjustment to keep the network functioning.
“However, this is a pressure airlines the world over have navigated during difficult historical events in the past, and I would say the industry is very resilient and can often stabilise quickly.
“Our immediate priority is on our customers and the 44,000 New Zealanders whose travel plans will be impacted. It’s in times of global disruption like this that the value of working with a travel professional really comes into its own.
“I ask for your patience as our travel consultants work alongside our partners to support Kiwi travellers across the country to get everyone where they need to be.”
Source: RNZ
Latest News
Opportunities to mitigate multi-million-dollar RNZ budget blowout likely missed – experts
Multiple opportunities to identify and mitigate a multi-million-dollar budget blowout at RNZ appear have been missed, according to the former executive director at Audit New Zealand.
The public broadcaster on Monday revealed a near $12 million shock financial loss after a litany of financial blunders, which will now lead to sweeping job cuts.
The $11.8m loss is more than 25 times the $470,000 RNZ had expected to lose over the year to June.
CEO Paul Thompson took responsibility for the result, and said internal reports gave an inaccurate picture of the finances, meaning the scale of the loss only became clear in October.
RNZ’s former chief financial officer Hilary Parker resigned unexpectedly in early October.
The board said it would commission an independent review into what went wrong.
Independent contractor Stephen Walker, who left the Audit Office earlier this year, said the size of the loss was surprising, as was the length of time it took to identify it – months after the financial year ended.
Supplied / OAG
“Probably more of a concern is that they had seemingly been unaware that they were running up a significant deficit until they were in the preparation stage of their annual report in October.”
Walker said public entities typically produced monthly financial reports.
An interim audit also took place before the end of the financial year, he said, but if the organisation hadn’t identified significant losses at that stage, the auditor could also be in the dark.
“It seems that there’s a real weakness in forecasting and budgeting that’s occurred here and that the monthly accounts, when they’re produced, either haven’t identified these significant variances against budget or the magnitude of them really hasn’t come to light until right towards the end of the financial year,” Walker said.
“And really at that point, there’s no opportunity for the chief executive, the leadership team to take, and the board to take, any corrective action because the year has effectively been completed.”
Walker said the “significant miss” was difficult to account for given it was more than 10 percent of RNZ’s total funding.
He said based on RNZ’s annual report, financial complexity didn’t appear to be a factor.
“This $11.8m loss isn’t made up of one particular item … it seems to have been contributed to by a number of separate expense lines running over budget. So I don’t think it’s necessarily to do with complexity.”
Among the errors, RNZ wrongly counted $2m from land sales as income in its budget. Staff costs also came in $3.2m over budget, including $1.4m in redundancy payments.
Professor at Auckland University’s business school Norman Wong said based on media reports the issues identified were “significant and troubling”.
Supplied / University of Auckland
“But recognising the sale of land as income in their budget is a basic error that one would have expected to have been caught and corrected well before it got to this point.”
With funding reductions at RNZ over the past two years, Walker expected greater scrutiny of financial results.
“Virtually every public entity has had their annual budget reduced. And so you would expect … the leadership team on a monthly basis and board – I’m not sure how frequently the board will consider the information – but you would expect them to be interrogating the results on a regular basis throughout the year,” he said.
Walker said initiating an independent review was the correct course of action and that he’d want to understand what information the leadership team and the board were regularly receiving.
He said he’d “love to say” surprising financial results were rare, but conceded they occured on a semi-frequent basis during his time leading the Audit Office.
“The benefit of independent scrutiny by the Audit Office – and the auditors providing that support to the Auditor General – [is] that the reporting is fairly presented at the end of the year, whether it’s good, bad or ugly.”
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