Jetstar fined $2.25 million for misleading travellers over cancellation compensation

Monday, 1 September 2025

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Jetstar has been fined $2.25 million for misleading travellers over their eligibility for compensation when flights were delayed or cancelled for reasons within the airline’s control.

The fine was handed down to the airline by Judge Brooke Gibson at the District Court in Auckland after the airline pleaded guilty to breaches of the Fair Trading Act.

The case was taken by the Commerce Commission which argued Jetstar’s behaviour had been “reckless”, saying the airline misled around 98,000 travellers in New Zealand after being tackled by regulators in Australia for similar behaviour.

Gibson said it was now generally accepted that “swingeing fines” were now imposed for serious corporate offending.

Jetstar, which is owned by Qantas, might have been fined more but Gibson took into account the airline’s co-operation with the commission’s investigation, its early guilty pleas and its expressions of contrition.

Wronged travellers who could be traced had been compensated, and the compensation due to travellers who could not be found was paid to a children’s charity. The airline had made compensation payments just short of $1.4m.

At an earlier hearing, the commission argued the starting point for calculating the fine should be $2.5m, but acknowledged the airline was due a discount.

The court heard that Jetstar was a large, well-resourced business whose misleading statements affected 2692 customers, who did not get compensation they were entitled to.

The commission told the court at an earlier hearing that the airline should have been on notice since 2015 that its compensation policies and procedures were misleading, many coming after the airline suffered significant disruptions during the Covid pandemic.

In 2018, Australian regulators took action against the airline in Australia over similar conduct. In 2022, Consumer NZ complained to the commission.

It told the court that Jetstar’s “poor” policies and procedures in New Zealand continued until 2024.

When the commission filed the 20 representative charges against the airline last year, its general manager for competition, fair trading, and credit, Vanessa Horne, said consumers had rights under aviation law.

Horne said the commission believed Jetstar’s communications likely discouraged consumers from seeking compensation they were entitled to, and that Jetstar likely denied legitimate claims.

“The Civil Aviation Act is clear that airlines have a responsibility to reimburse customers for loss caused by cancellations or delays on New Zealand domestic flights that are within the airline’s control,” Horne said.

This included delays or cancellations that are due to staffing or mechanical issues.

Horne said consumers were entitled to reimbursement for reasonable costs caused by such delays, which could include the cost of meals, accommodation, and other costs consumers had to pay to get to their destination. Compensation was up to 10 times the cost of the ticket.

The Montreal Convention set out consumers’ rights when travelling internationally, and consumers were entitled to reimbursements for costs incurred from delays and cancellations unless the airlines did all they could reasonably do to prevent the disruption, Horne said.

For international flights consumers were entitled to the reasonable costs arising from the delay, which could include replacement flights, accommodation, and food, up to a maximum set under the convention, currently about $11,000.

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