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Consumer rights with airlines: Flight delays and cancellations

Key Takeaway

New Zealand consumer law provides rights for airline passengers experiencing flight delays or cancellations. The Consumer Guarantees Act requires services to be performed with reasonable care and skill, allowing for remedies like refunds or compensation for foreseeable losses. The Fair Trading Act prohibits misleading airline conduct regarding delays or available options.

Consumer Rights with Airlines: Flight Delays and Cancellations in New Zealand

In New Zealand, airline passengers experiencing flight delays or cancellations may have rights under the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA). These laws establish standards for services and prohibit misleading conduct in trade.

The Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) applies to services, including air travel, that are ordinarily acquired for personal, domestic, or household use [Source: Consumer Guarantees Act 1993, s 2]. The CGA establishes several guarantees that apply to services supplied by a business (known as a 'supplier') to a person who acquires the services as a 'consumer' (meaning someone acquiring services for personal, domestic, or household use, not for resale or business use) [Source: Consumer Guarantees Act 1993, s 2].

Guarantees for Services When an airline provides a service, such as a flight, it must meet certain guarantees:

  • Reasonable care and skill: The service must be carried out with reasonable care and skill [Source: Consumer Guarantees Act 1993, s 28]. This means the airline must take all reasonable steps to provide the service competently, such as ensuring proper aircraft maintenance and adequate staffing.
  • Fitness for a particular purpose: If the consumer makes known a particular purpose for the service, and the airline represents that the service is fit for that purpose, it must be reasonably fit for that purpose [Source: Consumer Guarantees Act 1993, s 29].
  • Completion within a reasonable time: If no specific timeframe for completion is agreed upon, the service must be completed within a reasonable time [Source: Consumer Guarantees Act 1993, s 30].
  • Reasonable price: If the price for the service is not pre-determined by the contract, the consumer is not liable to pay more than a reasonable price [Source: Consumer Guarantees Act 1993, s 31].

Remedies for Service Failures If an airline fails to meet one of these guarantees, the consumer may be entitled to a remedy [Source: Consumer Guarantees Act 1993, s 32]. The nature of the remedy depends on whether the failure can be remedied and whether it is of a 'substantial character' (meaning it makes the service unfit for its common purpose, significantly different from the expected service, or unsafe) [Source: Consumer Guarantees Act 1993, s 32A].

  • Minor failure: If the failure can be remedied and is not of a substantial character, the consumer can require the airline to fix the problem [Source: Consumer Guarantees Act 1993, s 32(a)(i)]. If the airline refuses or fails to do so within a reasonable time, the consumer can have the service remedied by someone else and recover the reasonable costs, or cancel the service and obtain a refund for the unconsumed portion [Source: Consumer Guarantees Act 1993, s 32(a)(ii)-(iii)].
  • Major failure or cannot be remedied: If the failure is of a substantial character or cannot be remedied, the consumer can choose to cancel the service or obtain compensation for any reduction in its value [Source: Consumer Guarantees Act 1993, s 32(b)(i)-(ii)].
  • Consequential loss: In addition to these remedies, consumers can also seek damages from the airline for any loss or damage resulting from the failure that was reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 32(b)]. This could include costs like unexpected accommodation, alternative transport, or missed onward connections that were part of a single booked journey, provided these losses were a reasonably foreseeable consequence of the airline's failure.

When the CGA May Not Apply The CGA does not apply where services are supplied for business purposes, unless the parties agree otherwise [Source: Consumer Guarantees Act 1993, s 43(2)]. Furthermore, if a flight delay or cancellation is due to circumstances entirely outside the airline's control, such as severe weather or air traffic control strikes, and the airline has taken all reasonable care and skill to minimise disruption, it may not be considered a breach of the CGA.

The Fair Trading Act 1986

The Fair Trading Act 1986 (FTA) is designed to protect consumers from misleading and deceptive conduct and unfair trading practices by businesses ('in trade') [Source: Fair Trading Act 1986, s 9].

Misleading Conduct and False Representations The FTA prohibits:

  • Misleading or deceptive conduct: No person may, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive [Source: Fair Trading Act 1986, s 9]. This could apply to how an airline communicates the reasons for a delay or cancellation, or the options available to passengers.
  • False or misleading representations: Businesses are prohibited from making false or misleading representations about services [Source: Fair Trading Act 1986, s 13]. For example, falsely stating the reason for a delay (e.g., claiming weather when it is a mechanical fault) or misrepresenting consumer rights regarding refunds or rebooking.

Enforcement and Remedies The Commerce Commission is responsible for enforcing the FTA [Source: Fair Trading Act 1986, s 36]. If an airline breaches the FTA, a court can order various remedies, including:

  • Injunctions: A court order requiring a party to do or refrain from doing a specific act [Source: Fair Trading Act 1986, s 41].
  • Damages: Monetary compensation for loss or damage suffered as a result of the breach [Source: Fair Trading Act 1986, s 43].
  • Variation or cancellation of contracts: Changing or ending a contract [Source: Fair Trading Act 1986, s 43].
  • Pecuniary penalties: Financial penalties imposed by a court, often substantial, for serious breaches of the Act [Source: Fair Trading Act 1986, s 40].

Applying the Law to Flight Delays and Cancellations

Under the Consumer Guarantees Act (CGA) If a flight is significantly delayed or cancelled due to reasons within the airline's control (e.g., mechanical issues that could have been prevented with reasonable care, crew unavailability, overbooking, or operational decisions) and the airline has not exercised reasonable care and skill, it may be a breach of the CGA [Source: Consumer Guarantees Act 1993, s 28, s 30]. In such cases, passengers may be entitled to:

  • Rebooking or Refund: The airline must remedy the failure by offering a rebooking on the next available flight, or if that is not suitable, a refund for the unconsumed part of the service [Source: Consumer Guarantees Act 1993, s 32].
  • Compensation for Foreseeable Losses: Passengers may also claim for reasonably foreseeable losses, such as the cost of essential accommodation, meals, or alternative transport if stranded, provided these costs directly resulted from the airline's failure to meet its guarantees and were reasonably foreseeable [Source: Consumer Guarantees Act 1993, s 32(b)].

Under the Fair Trading Act (FTA) If an airline makes false statements about the reason for a delay or cancellation, or misrepresents a passenger's rights (e.g., incorrectly stating that no refund or alternative flight is available), this conduct could breach the FTA's prohibitions against misleading or deceptive conduct and false representations [Source: Fair Trading Act 1986, s 9, s 13]. Consumers who suffer loss due to such misleading information may seek damages under the FTA [Source: Fair Trading Act 1986, s 43].

When to Seek Independent Legal Advice

Individuals seeking to understand their specific rights and options regarding airline delays or cancellations should consider contacting the Commerce Commission for issues related to fair trading, or the Disputes Tribunal for claims under the Consumer Guarantees Act. For free legal advice, individuals can contact their local Community Law Centres.

Key Resources