Air New Zealand Air Points - This stinks: refund refused for cancelled flight

Was booked on NZ503 CHC-ZQN on Saturday 24th March. Flight was cancelled because of fog. Made my own way to Queenstown by car. I am not asking for compensation, merely a refund of the ticket. I have been told by two or three different NZ agents that no refund is due as the flight was cancelled for weather rather than operational reasons, that it was the airport and not AirNZ that cancelled the flight, and so on. They have offered a "credit note" for the same three travellers valid for one year, but that is all.

From their own terms and conditions of carriage from their website:

9.1 SCHEDULES

We undertake to use our best efforts to carry you and your Baggage with reasonable dispatch and to adhere to published schedules in effect on the date of travel. However, to do so, we may need to use a substitute aircraft and/or the services of another carrier. We may also be obliged to change the time of flights, often for reasons beyond our control, and consequently, times shown in timetables cannot be guaranteed and thus form no part of your contract of carriage with us.

9.2 CANCELLATION AND RE-ROUTING

9.2.1 We reserve the right to substitute an alternative carrier and/or aircraft. If we cancel a flight, fail to operate a flight reasonably according to the schedule, fail to stop at your destination or Stopover, or cause you to miss a connecting flight on which you hold a confirmed reservation, you shall have the option, subject to our agreement, either:

9.2.1.1 to be carried on another of our scheduled services on which space is available without additional charge and, where necessary, extend the validity of your Ticket; or
9.2.1.2 to be re-routed to the Stopover or destination shown on your Ticket by our own services or those of another carrier. If the fare and charges for the revised routing are lower than what you have paid, we shall refund the difference;
9.2.1.3 if neither of the above alternatives is acceptable to you, we will make a refund in accordance with the provisions of 10.2 and we shall have no further liability to you.

10.2 INVOLUNTARY REFUNDS

10.2.1 If we cancel a flight, fail to operate a flight reasonably according to schedule, fail to stop at your destination or Stopover, or cause you to miss a connecting flight on which you hold a reservation, the amount of the refund shall be:
10.2.1.1 if no portion of the Ticket has been used, an amount equal to the fare paid (including applicable taxes, levies and surcharges notwithstanding the applicable fare rules);
10.2.2 If a portion of the Ticket has been used, the refund will be the higher of:
10.2.2.1 the one way fare (less applicable discounts and charges but including applicable taxes, levies and surcharges notwithstanding the applicable fare rules) from point of interruption to destination or point of next Stopover; or
10.2.2.2 the difference between the fare paid and the fare for the carriage used (including applicable taxes, levies and surcharges notwithstanding the applicable fare rules).

9.2.1.3 seems clear enough, but the agents are not honouring it.

How best to proceed? Any thoughts or suggestions?

You may not be aware but currently NZ Herald has been running a story about overselling and bumping by NZ (mainly, also QF) and lack of compensation. The relevant Government minister encouraging passengers to seek compensation (http://www.nzherald.co.nz/topic/story.cfm?c_id=113&objectid=10429921) through Disputes Tribunal if necessary. The circumstances are different but useful reminder that if get nowhere with the airline there may be other avenues to pursue.

Maybe the airline can argue that they didn't cancel the flight, rather the airport did. As the rules say

If we cancel a flight, fail to operate a flight reasonably according to the schedule, fail to stop at your destination or Stopover, or cause you to miss a connecting flight on which you hold a confirmed reservation, you shall have the option, subject to our agreement, either:

Maybe the airline can argue that they didn't cancel the flight, rather the airport did. Sure -- they could do so. And that, along with all the piss poor customer service and bad press from their overbooking and bumping issues, could very well guarantee Air NZ a well deserved place on consumer.org.nz's "Consumer Complete ... Awards" list:

http://www.consumer.org.nz/topic.asp?docid=2840&category=Public%20Issues&subcategory=Consumerism&topic=Consumer%20Complete%20Ass%20Awards

... have been told by two or three different NZ agents that no refund is due as the flight was cancelled for weather rather than operational reasons, that it was the airport and not AirNZ that cancelled the flight, and so on. They have offered a "credit note" for the same three travellers valid for one year, but that is all...How best to proceed? Any thoughts or suggestions?
I would have thought this weather scenario pretty common, and the airlines are almost certainly within legal rights to deny responsibility on the expectation that travel insurance should cover the out of pocket costs incurred as a result. Because of this my further guess is that the credit note offer is pretty generous, and I'd take it. (Some people might do that and make an insurance claim too.)

... currently NZ Herald has been running a story about overselling and bumping by NZ ...I rarely see the Herald, but did see a front page report on this last weekend and I thought it was a fine example of press sensationalism. Oversold flights? No adequate compensation? That may be poor customer service, but welcome to the real world . . .

Did you contact them before you made your own way to Queenstown or after you had made the trip?

If you explained to them before travelling that 9.2.1.1 and 9.2.1.2 weren't going to work, then I believe a refund would be appropriate. However, if you took the drive and then only contacted them afterwards, I can see why they would only offer a credit note.

The contract gives them the opportunity to provide you with alternatives, and then if they aren't suitable to provide you with a refund. I can't tell from your post whether you discussed the options with them before driving, but if you didn't formally give them the opportunity to present alternatives prior to taking a car, then I think the credit note is a fair resolution.

But - as I said - I can't tell from your post whether you did speak to them about it before driving.

AT

Did you contact them before you made your own way to Queenstown or after you had made the trip?

If you explained to them before travelling that 9.2.1.1 and 9.2.1.2 weren't going to work, then I believe a refund would be appropriate. However, if you took the drive and then only contacted them afterwards, I can see why they would only offer a credit note.

The contract gives them the opportunity to provide you with alternatives, and then if they aren't suitable to provide you with a refund. I can't tell from your post whether you discussed the options with them before driving, but if you didn't formally give them the opportunity to present alternatives prior to taking a car, then I think the credit note is a fair resolution.

But - as I said - I can't tell from your post whether you did speak to them about it before driving. Oh good grief, it's complete nonsense to ask or quibble over whether the pax did or did not "formally give them the opportunity to present alternatives". Whether Air NZ "formally had the opportunity to present alternatives" or not, the decision on whether to stick around after a flight has been cancelled or leave and ask for a refund is completely and totally up to the pax. The pax made the decision to ask for a refund and Air NZ should honour it.

I would have thought this weather scenario pretty common, and the airlines are almost certainly within legal rights to deny responsibility on the expectation that travel insurance should cover the out of pocket costs incurred as a result. Because of this my further guess is that the credit note offer is pretty generous, and I'd take it. (Some people might do that and make an insurance claim too.) Consider rereading the original post, especially the part where the OP states: I am not asking for compensation, merely a refund of the ticket.

This has nothing to do with out of pocket costs or travel insurance. The pax bought a ticket. The flight was cancelled. The pax, as is his right, asked for a refund.

I disagree.

It's a legal contract for services, and should be interpreted as such. I can see why the OP is upset at the outcome and offer of credit, but if you're going to try and rely on the wording of a contract to get a favourable result, you can't just ignore the bits of the contract that you don't like or don't suit you.

If the plane was half an hour late, is that "failing to operate the flights reasonably on schedule?" Would you just leave the airport and expect a refund later? What is "reasonably on schedule"? Should the airline have to fork out a refund whenever a passenger decides to interpret the T&Cs his or her own way? Wouldn't it make sense to double check your options before leaving the airport?

Interpretation of clauses such as these are generally interpreted as: Party A gives Party B the opportunity to rectify the problem, and if the rectification offer isn't satisfactory under the test provided in the contract (which in this case is a very generous and subjective test, i.e. "neither of the above alternatives is acceptable to you...") then you can choose to get a refund.

That said, the contract should obviously be strictly enforced to the customer's detriment as rarely as possible; you would expect that customer service would step in and sort it out 99% of the time.

Still - there wasn't enough info from the original poster. He/She didn't say whether their first contact with CS was after the drive or not. Whether you like it or not, it is relevant when interpreting such a contract under NZ contract laws.

Interesting to read the range of opinions!

I did not stick around at CHC and it was not possible to talk to Air NZ without incurring a major delay. Their phone lines were blocked solid and the queue for the counter at the airport was enormous. I took the decision to march to the Hertz desk and get a car, within 10 minutes of the announcement that the flight was cancelled.

As it happens, I believe the only successful NZ CHC-ZQN flight that day was the 16:20 or thereabouts, flown by an AT7, which we would not have got spaces on, we were too far back in the queue.

However, when I contacted AirNZ after arriving in Queenstown, the first thing they did was to offer me a new flight from CHC-ZQN, so I can say that I have been offered the alternative and have declined it.

My out of pocket expenses are negligible - the car was booked from ZQN-DUD in any case, and Hertz merely altered the existing booking. All I have lost is about 6 hours of my time. But it is the principle of the thing that matters.

The other issue is the failure to get past the first line of defence of reservations agents. They have had off-line conversations with the team leader, but would not allow me to speak to him/her directly as "they have nothing more to add". Two attempts to pass me on to customer services have failed: the first time I got a recorded message that the number had changed. The second time I got an "please talk to the bleep or call back in office hours" message, even though it was office hours.

There is a limit as to how much of my vacation time I am prepared to spend on this. I will resort to email and pursue further later.

I guess another avenue to follow is to dispute the charge with the credit card company - I used a BA Amex.

Hi redshift

I think when you need to do is point out to CS that the alternative offers made to you under the terms of the contract that I mentioned earlier weren't acceptable in view of your particular travel requirements (although I'd keep quiet with regard to where you were when you made / took that call!) and that you should therefore be entitled to a refund under the T&Cs. Assuming that you are based overseas, I think you should also mention that a credit note doesn't really help you.

But as I say - emphasise the point that Air NZ offered alternatives that weren't going to fit into your travel plans, and that you would prefer the refund.

AT

p.s. I'd advise against taking it up with the credit card company - they'll only give you the money if the ticket was never issued or the service offered by the ticket never existed. In disputes like this, they tend to get a bit shirty if you get the money back and then Air NZ come back and challenge it by pointing out that you had a valid ticket in exchange for the cash. Shirty = can impose a penalty or make little black marks next to your name in their system! Keep this one between you and the airline

Consider rereading the original post, especially the part where the OP states: I am not asking for compensation, merely a refund of the ticket.

This has nothing to do with out of pocket costs or travel insurance. The pax bought a ticket. The flight was cancelled. The pax, as is his right, asked for a refund.I appreciate your concern about my reading ability, but travel insurance remains the get-out for the airline - and a decent policy would refund both a non-refundable ticket AND the cost of the alternative transport.

Anyway, in this case what the OP wanted was thoughts on how to proceed. I suggested the airlines are probably within their rights to refuse a refund and that taking the credit note was a good idea. I also mentioned claiming on insurance.

You on the other hand slagged off Air NZ's customer service, added a URL for consumer.org.nz, trivialised another posters response, and shared with us your view that the pax could ask for a refund - which in any case no-one else had disputed.

And such are the joys of internet forums . . . :rolleyes:

:)

Well said KBD

Interesting to read the range of opinions!

[ ... ]
The other issue is the failure to get past the first line of defence of reservations agents. They have had off-line conversations with the team leader, but would not allow me to speak to him/her directly as "they have nothing more to add". Two attempts to pass me on to customer services have failed: the first time I got a recorded message that the number had changed. The second time I got an "please talk to the bleep or call back in office hours" message, even though it was office hours. .

Some background info for you ....

Last Friday (i.e. just the day before your cancelled flight) the Christchurch Press ran an editorial titled, "Arrogant Air NZ" about Air NZ's treatment of travellers in cases of overbooking and such. I'd imagine res agents and customer service staff might be quite gunshy at the moment when getting calls from pax who suffered through bumps or irregular ops. There also have been some pointed articles in the Herald. Here's a link to the ChCh Press editorial:

http://www.stuff.co.nz/stuff/thepress/4001982a6528.html

So there understandably could be a bit of ducking and covering on the front lines going on now.

I appreciate your concern about my reading ability, but travel insurance remains the get-out for the airline - and a decent policy would refund both a non-refundable ticket AND the cost of the alternative transport.

Anyway, in this case what the OP wanted was thoughts on how to proceed. I suggested the airlines are probably within their rights to refuse a refund and that taking the credit note was a good idea. I also mentioned claiming on insurance. Ok, so you suggest taking credit notes the OP did not want and apparently could not use, and making a claim on insurance the OP might very well not have to recoup out of pocket costs he said he wasn't asking for and were in fact negligible. Excellent :rolleyes:

The OP didn't mention that the credit note wasn't v useful until after KBD's post. So pointing out that a credit note was a good result was a fair comment.

Some travel insurance covers the cost of a cancelled flight regardless of whether the airline offers to put you on another flight and regardless of whether you suffered other monetary losses (mine does)

Therefore I for one think that KBD's suggestions were all valid options to explore based on the OP's first post.

Your assumption that it was the OP's right to a refund regardless of the circumstances was incorrect. Anyone who has done Contract Law 101 would have known that from the clauses that were included in the OP's post. As it turns out, based on the facts it looks like the OP does have a good case to argue that he was offered the alternatives and that they were not acceptable to his travel plans, and perhaps a refund is in order. But this was all contingent on whether each party had fulfilled their obligations up to that point in the execution of the contract.

Contractual obligations in this case were dictated by the wording of the contract aloing with the relevant laws and principles of NZ contract law. Not by what the NZ Newspapers say or whatever blanket statements David Russell from the Consumers' Institute happens to throw at the media on any given day.

Some travel insurance covers the cost of a cancelled flight regardless of whether the airline offers to put you on another flight and regardless of whether you suffered other monetary losses (mine does) Travel insurance pretty much guarantees monetary losses, since you're paying for it. It's a "product" (like CDW and "extended warranties") that's sold by feeding on consumers' fear and ignorance. It's a huge, huge profit center for sellers; it's rarely in the best economic interests of its buyers and it's often disproportionately purchased by those that (relatively) can afford it the least. But, hey -- it's their choice (and apparently yours).

However, the existence or not of travel insurance has little to do with a completely straightforward and completely reasonable request by a pax that an airline refund a ticket for a flight cancelled because of weather. It's not an unusual request -- other airlines handle this without any grief. These are also airlines that have strikingly similar CoCs on the matter.

Weather happens. Sometime flights must be cancelled because of it. Most airline's CoCs state that the airline can choose to simply refund the ticket if they, the airline, wish in case of a WX cancellations (or any other reason), no matter what the pax desires. Weather is not the airline's fault. It is also very important to remember that weather is not the fault of the pax either. This seems to be something Air NZ is forgetting here. In the case of a WX cancellation the pax, just like the airline, has the right to call the whole thing off and end things via a refund. Yes, the airline can offer the pax alternatives, but when it come down to it the choice whether to take what's offered or demand a refund in this case is completely up the pax, NOT Air NZ.

The proper reading of the clauses is

then

[i]you shall have the option, subject to our agreement, either:

9.2.1.1 to be carried on another of our scheduled services on which space is available without additional charge and, where necessary, extend the validity of your Ticket; or

9.2.1.2 to be re-routed to the Stopover or destination shown on your Ticket by our own services or those of another carrier. If the fare and charges for the revised routing are lower than what you have paid, we shall refund the difference;

What requires Air NZ's and the pax agreement is transport on another NZ service OR transport using another carrier or routing.

However if the pax chooses a refund in case of a wx flight cancellation that does NOT require Air NZ's agreement; Air NZ just needs to honour it.

Ceasing the stonewalling and issuing a refund would the right thing to do. It also would free up staff time to actually be helpful to customers (distressed or otherwise) instead of wasting folk's time and goodwill.

However if the pax chooses a refund in case of a wx flight cancellation that does NOT require Air NZ's agreement; Air NZ just needs to honour it.

This is only partially correct. As I mentioned above (and as you seem to have ignored), in such contracts the contingency refund only needs to be offered if the alternative modes of transport have been offered and turned down by the passenger. As I also said (which you have again ignored) the test for the contingency refund being paid is extremely generous toward the passenger - all they need to do is state that the alternatives are unacceptable.

Yes, the airline can offer the pax alternatives, but when it come down to it the choice whether to take what's offered or demand a refund in this case is completely up the pax, NOT Air NZ.

Again, you don't understand (or are ignoring) the basics of NZ contract law that have already been set out. The passenger is entitled to a refund if the alternatives offered are not acceptable. The alternatives have to be offered for the passenger in order for him/her to choose the refund. Right or wrong in your opinion (and you seem to have many) - that's irrelevant. It's simply the way this particular part of the contract is interpreted under NZ law.

This may not be how it's interpreted in Quokkaland, but since this contract is governed by New Zealand law, you haven't got a heck of a lot of leeway for arguing otherwise. Again - what is morally the right thing for Air NZ to do may not be the same as their legal obligations. You seem to think Air NZ is bound by morals. No, they are bound by numerous contractual obligations. Sure, for the sake of customer relations they should err on the side of generosity, but to say that the pax should get a refund no matter what is plain wrong.

The OP arguably did turn down the alternatives, so his chance of getting a refund on the facts is pretty good.

You can either quote a few newspaper articles written by reporters who are parroting clueless politicians... or you can apply the law to the facts. Either way, you don't seem to be getting the point being made.

Many thanks for the input, folks. I am a bit surprised though that no-one has posted to say that this has happened to them before, and what the outcome was.

Sure I've had weather cancellations before with Air NZ. But each time NZ has been happy to rebook me at a time that is convenient to me. So I'm not familiar with their refund process.

Hi redshift - as with Kiwiflyer, I take a fair few NZ domestic flights, so when weather has led to my flights being cancelled, the credit note is a perfectly acceptable outcome for me.

On the assumption you aren't NZ-based, you should point out that you have no idea when you'll next be in NZ so a credit note is a bit hopeless.

I emailed this thread to a friend who has contacts involved in aviation business regulatory issues and he talked to one of them.

The interesting bits of info I got back include:

1) The Air NZ CoC looks strikingly similar to lots of other airlines' CoC because it's based on the IATA's RP (Recommended Practice) 1724 on General Conditions of Carriage. NZ's CoC even uses the same numbering.

2) The practice of offering credit notes or extentions of ticket validity to passengers with non-refundable tickets who suffer force majure events is now a very common practice and in many juristictions required. However this practice is for *passengers* who suffer force majure events (death in family, illness), not for when airlines cancel. Air NZ staff seem to be confused on the point.

3) The offering of credit notes was not IATA's (i.e. not the airlines') idea. IATA tried insisting passengers buy insurance and leave its member airlines off the hook and with the money. The reason many airlines now offer credit notes in these cases is because the UK OFT (Office of Fair Trading) went after the airlines and IATA pointing out it was unfair that airlines had contracts that protected themselves when they suffered from a force majure event, but offered no protection to the passenger when he suffers a personal force majure event. The OFT also attacked other contract conditions they deemed unfair. Airlines serving the UK eventually met the OFT demands, albeit very grudgingly in some cases.

4) Because of the OFT's position, insistence and success on these issues, addressing these unfair to the consumer contract conditions was also taken up by the EU in forming its regulations.

5) When the airline cancels a flight, the intent of RP 1724's suggested CoCs sections on cancellation (9.2.*) are to enable the passenger to get a refund if he so chooses. The intent of the clauses on alternatives are to help give the passenger other options (as long as the airline agrees) and guidance to the airlines, not to force some sort of hoops the passenger must suffer through in order to get the refund.

6) The contact said he never heard of any airline that would claim a passenger could be denied a refund if they somehow didn't have alternatives presented to them. And while he knew little about New Zealand law, he'd be vastly interested if Air NZ actually took the generic international RP 1724 and used New Zealand law to actually craft such a consumer unfriendly requirement.

I guess another avenue to follow is to dispute the charge with the credit card company - I used a BA Amex.

This could be a good idea:

1. Assuming it's a UK card, it gives you specific consumer protection. This is one of the big selling points for using the card in the first place. I've got a feeling this doesn't fully kick in unless the goods are worth GBP 100 or more though.

2. You may find it much easier to deal with a company back home than an overseas one. And it won't waste vacation time.

3. The BA Amex gives you extra perks in addition - as you might expect from a card issued by a travel services company in conjunction with a frequent flyer program. I had a quick look on the website and then realised life's too short to deal with the small print. But you might like to look into 'Travel Accident Benefit' and 'Travel Inconvenience Benefit', one of which mentions booking scheduled flights on the card.

And don't feel pressured into not taking the issue up with Amex in case they find some way to penalise you - that just isn't going to happen. If you have rights under your agreement with them then they will honour them.

So ...

We returned from our trip, and I then sent a brief note via the AirNZ website customer feedback option briefly outlining the details of the cancelled flight, that we had been offered rerouting and a credit note but that neither of these was acceptable to us, and that we therefore claimed a full refund as per the Conditions of Carriage.

48 hours later I have been emailed three fresh e-ticket PDFs, one per passenger, each indicating that the fare will be refunded to my Amex card. There was no further explanation or interpretation given.

I now wait with baited breath to see this on the Amex card e-statement.

So in summary, customer services processed this efficiently and according to the CofC. The disappointment was the misinformation and run-around given by the front-line agents and their supervisors.