COVID-19 Flights cancelled by Airline

Forums › Travel (planes, train, cruise) › COVID-19 Flights cancelled by Airline - C/card Charge backs?

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#2453374 2-Apr-2020 21:58

One thing for the OP to remember: I'd imagine Air NZ's lenders (i.e. the banks and the government) have general security agreements over the most valuable assets of the company, i.e. planes and plant. Even if that's not true, financiers certainly will have individual securities over most of these individual pieces of these most valuable assets of Air NZ because Air NZ certainly would have borrowed to buy any plane that it owns. In the event of insolvency, secured creditors like the above rank ahead of everyone else and get first dips over secured assets, then preferential creditors (i.e. employees and the IRD) come into play, and the leftovers are for unsecured creditors (e.g. passengers who have prepaid for flights). At the best of times, you do not want to be an unsecured creditor. With businesses that basically rely on cashflow and don't hold much tangible assets, you aren't gonna see much -- if at all -- as an unsecured creditor.

GZ, despite the site owner's very best efforts, does not escape a common curse of internet forums: most posters are incredibly ignorant when it comes to matters of law and general principles/notions of commerciality. On the former, people just seem to think it's a free for all. From my observations, @Handle9 is one of the few on here that has a genuine and informed grasp of both (albeit necessarily that of a layperson's view from the legal perspective). He's right on the point of Air NZ needing to behave commercially: given the unusual circumstances (i.e. that it's not unreasonable for Air NZ to believe that its Ts&Cs might prevail - that doesn't necessarily mean it is right. Only the courts can confirm this) and the solvency threat that Air NZ is under, it's actually more than reasonable for Air NZ to behave as it has. If it turns out that it has to disgorge all the prepaid airfares for flights affected by COVID-19, people in your position might find it to be a Pyrrhic victory when placed in the position of an unsecured creditor in liquidation.

As with most things in life, the truth is complicated and often hard to bear.

larknz

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#2453385 2-Apr-2020 22:14

I must have been lucky. I had a round the world ticket for July and my travel agent was able to get me a refund less a $400 cancellation fee. I am grateful to get anything.

BlinkyBill

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#2453484 3-Apr-2020 08:08

Confirmed that Air NZ domestic travel insurance scheme does not cover cancellation due to pandemic nor government prohibition on travel.

sidefx

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#2453492 3-Apr-2020 08:21

I also have flights booked in a couple of weeks.. admittedly not worth as much as yours, but I hadn't even considered trying to get a charge-back or anything like that - I'm more than happy for Air NZ to keep the money and use it to make final payments to all the staff they are having to make redundant over the next few weeks, and\or staff who are continuing working under very difficult circumstances.

EDIT: TBH I had assumed I had just lost the money, but just checked and I see when I try manage my flights that Air NZ is holding the funds in credit to be used on a future trip as well. Good to know.

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networkn

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#2453497 3-Apr-2020 08:29

I've also heard anecdotally of companies refusing to sell products to consumers who chargeback. I don't think it would apply here, but still, it's in my opinion the wrong way to go.

amiga500

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#2453499 3-Apr-2020 08:33

I will be quite happy to get a credit from Air NZ for my cancelled Brisbane trip. It should cover two or three return flights within NZ. Maybe I will go from Christchurch to Queenstown and pretend I am flying from Paris to London which is almost the identical distance!

itxtme

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#2453525 3-Apr-2020 09:24

What happens when this whole mess lasts 16 months because we are all waiting on a vaccine to actually make travel safe? The credit just expires? Possession it would seem is 9/10ths of the law.

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networkn

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#2453527 3-Apr-2020 09:30

itxtme:

What happens when this whole mess lasts 16 months because we are all waiting on a vaccine to actually make travel safe? The credit just expires? Possession it would seem is 9/10ths of the law.

Do you really think an entity who's owners include NZ Government is going to "steal" your money?

I'd suggest worrying about it closer to the time, or do as has been suggested, investigate the DT to get funds back.

There isn't anything else to add to this discussion surely?

kiwiharry

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#2453533 3-Apr-2020 09:38

Air NZ also made the credit valid for 12 months from date of credit, rather than 12 months from date of purchase.

Our extended family group of 10 were booked to go to Hawaii next week for a family vacation, so with Air NZ we now have until April 2021 to use the credit.

Our domestic flights between islands in Hawaii have been credited for 12 months from date of purchase, so only have until Nov this year to utilise them. This is looking highly unlikely.

When we booked our tickets I knew with full knowledge that they were non-refundable tickets, so there was always a small percentage that there could be something that may cause us to lose money on these flights. Didn't expect this pandemic to be the cause, so highly grateful that funds are to be held in credit and now it is up to me to decide how I best take advantage of that.

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itxtme

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#2453564 3-Apr-2020 10:02

networkn:

There isn't anything else to add to this discussion surely?

I would suggest at time like this when you do not know the personal circumstances of many people posting [and some of those circumstances are dire] that you let others discuss openly, with their point of view. Having an oh well see what happens attitude may work for you, but for many of us that is not the case.

concordnz

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#2453625 3-Apr-2020 11:14

dejadeadnz:

Concordnz: Well, the airlines and customers such as yourself (who take a similar position to you) clearly don't agree on what is the correct outcome. And as a RL lawyer has shown to you, what the law requires in this case isn't crystal clear. Unless you want a society where people who disagree with one another just take to baseball bats, I am not sure why you are so adverse to going to the DT. The filing fee is minimal, you can request to attend by phone, and unless the Referee has been procedurally unfair or the decision is so ridiculously wrong in law that it is liable to be overturned via judicial review at the HC (at the cost of tens of thousands), almost every single DT case ends there and large corp orates abide by them.

If you don't want to avail yourself of legitimate recourse society has provided to you, don't moan. It's not immediately obvious that the airline is being unreasonable as the circumstances are unusual and basically without precedent in living memory.

Edit: Made clear who I am replying to.

dejadeadnz: To clarify, i'm not moaning,
Simply here to see what my options of recovery might be, (I was specifically wanting clarity around chargback possibilities)

My reason for 'discounting' going to the DT, is a time/benefit/chance of success/systemic overload/recovery stress calculation,

The DT system is guaranteed to be hugely 'overloaded' with cases out the other side of this,
and even its existing rulings are often 'random/inconsistent' - (this is likely to get worse, when overloaded)

There is likely lots of cases which are more important than mine - (I will be reducing the backlog in the system, if I dont engage in it - and let more important cases 'hopefully' get justice)

As you are aware A DT Ruling, is simply a 'ruling' as to liability,
this is totally separate - from actually 'seeing' the money -
you then have the time consuming(& stressful) and costly process of actually enforcing collection/payment, or getting an attachment order.

(I see all this, as more'costly' than the potential to recover $1000 or part therof, and then less costs to recover) - which is why I 'wrote off' the DT as an option for me.

>>As with most things in life, the truth is complicated and often hard to bear.
This i reconise, - which I value considered/insightful responses,

@larknz - Great to hear, you have had some success in this area,
Hopefully more companies take the same strategy, when they have failed to provide their service.

concordnz

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#2453627 3-Apr-2020 11:24

itxtme:

What happens when this whole mess lasts 16 months because we are all waiting on a vaccine to actually make travel safe? The credit just expires? Possession it would seem is 9/10ths of the law.

This is a big part of the problem, The credits WILL expire, - (Why are they only for 12 months?.....)
And posession is 9/10's of the law

- the Airline is currently, no longer flying to the location i had booked - so I have no use for a Credit, (and no interest in flying for the next 3-4 years).

It could be an amusing thread(elsewhere - not here please),
For someone(knowledgeable) to outline, what happens to these "credits" in the event a person is Bankrupted ? (say someone had a credit of $30,000 of travel from a cancelled around the world trip)
It is technically an 'asset' of theirs, - but their creditors cannot get their hand on it (even the Tax department cant I suspect)

networkn

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#2453629 3-Apr-2020 11:27

itxtme:

networkn:

There isn't anything else to add to this discussion surely?

I would suggest at time like this when you do not know the personal circumstances of many people posting [and some of those circumstances are dire] that you let others discuss openly, with their point of view. Having an oh well see what happens attitude may work for you, but for many of us that is not the case.

The same correct answer would apply to all of those people. In Short: You either wait and see, or explore your legal recourse through the DT.

IE : Asked and Answered.

dejadeadnz

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#2453724 3-Apr-2020 12:57

concordnz:

As you are aware A DT Ruling, is simply a 'ruling' as to liability,
this is totally separate - from actually 'seeing' the money -
you then have the time consuming(& stressful) and costly process of actually enforcing collection/payment, or getting an attachment order.

As I've explained to you elsewhere (in different words), if you get a mere refund from the airline and then it goes into liquidation soon after, you can guarantee that a liquidator will come wanting to clawback the sum received because you've received priority over other creditors in violation of the pari passu principle. To be brutally blunt, I think people who think that Air NZ (as it currently is) can't fold is naive. You may find that whatever that you get back might not mean an awfully lot ultimately - it's just a product of these extraordinary times.

concordnz

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#2453746 3-Apr-2020 13:19

dejadeadnz:

concordnz:

As you are aware A DT Ruling, is simply a 'ruling' as to liability,
this is totally separate - from actually 'seeing' the money -
you then have the time consuming(& stressful) and costly process of actually enforcing collection/payment, or getting an attachment order.

As I've explained to you elsewhere (in different words), if you get a mere refund from the airline and then it goes into liquidation soon after, you can guarantee that a liquidator will come wanting to clawback the sum received because you've received priority over other creditors in violation of the pari passu principle. To be brutally blunt, I think people who think that Air NZ (as it currently is) can't fold is naive. You may find that whatever that you get back might not mean an awfully lot ultimately - it's just a product of these extraordinary times.

Point taken, (that's another good reason not wast time with the DT process)

I think we have effectively got a 'nationalised' Airline at this point - they will just wait a couple of years for the share to be worth 'cents' - before converting their equity loan to effective ownership, (but thats a conversation for another thread as well)

>>You may find that whatever that you get back might not mean an awfully lot ultimately
Ultimately, it means 5 months [less] worth of being able to put 'food on the table' to me.

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