Sharechat Logo

Air NZ to amend booking engine after lawyer’s complaint

Friday 19th July 2019

Text too small?

Air New Zealand will make changes after a lawyer complained to the Commerce Commission over scarcity pricing tactics. 

Barrister Michael Wigley - whose criticism over opt-out insurance led to a formal warning for the airline in 2015 - has gone to the regulator over the Air New Zealand's use of the phrase 'Flight Selling Out'. 

He made the complaint after seeing the phrase when booking flights on his mobile. He said he got to the fine print after scrolling through 13 flights which showed: “Selling out means be quick - there are fewer than 5 seats at these prices.”

The reference is to the seats at a certain price being low, not the flight being close to full. 

“Hardly anyone reads the small print on a major booking portal like this. Marketers such as Air New Zealand know it. The airline’s management and board know it,” Wigley said. 

After BusinessDesk brought the complaint to Air NZ’s attention the airline responded, “in hindsight we believe ‘fewer than five seats available at these prices’ would better reflect the message we are trying to convey to customers.” 

“We are progressively amending both our mobile and desktop booking flows,” a statement from the airline said. The airline didn't address the question of how long it had used the tactic. 

Air NZ, which was recently crowned New Zealand’s most trusted brand by research firm Colmar Brunton, said it had not yet received any notification from regulators about the complaint that was made earlier this month. 

The Commerce Commission said it was still reviewing the most recent complaint. It received two others about scarcity tactics in the past 12 months, but has taken no action. 

The practice of generating ticket sales by giving consumers the impression there aren’t many left is among complaints the Commerce Commission has against online ticket marketplace Viagogo. That case is due to be heard in the Court of Appeal in August. 

Wigley has also made a formal complaint to the commission about the airline and its sustainability claims relating to the removal of newspapers from Koru lounges. 

The airline said there are two reasons for removing newspapers from lounges. First a decline in customers reading paper materials because news can be accessed online, and second its efforts to minimise environmental impact. 

In May the airline updated its guidance for 2019 to profit before tax exceeding $340 million, from previous guidance of between $340-400 million. The guidance had already been cut in January from $385-495 million.  

At the time Jarden (then FNZC) analyst Andrew Steele said he was watchful of the domestic consumer environment as revenue was disappointing due to slow domestic travel. 

An analyst who asked not to be named said that Air NZ will use scarcity tactics to drive better revenue outcomes because it motivates people to make decisions. 

“It is a business very driven to drive revenue outcomes and it would be looking for that outcome whether it was six months or 12 months ago.”

Competition lawyer Wigley has been outspoken about the airline’s practices in the past, four years ago he complained about how the airline would automatically insurance to a fare, resulting in a formal warning. 

The shares rose 0.2 percent to $2.78 at noon today, having fallen 14 percent in the past year.

(BusinessDesk)

NOTE: please be advised to read full articles from Business Desk Website, you will have to pay a subscription fee on their website.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar consolidates weekly gain of more than a US cent
NZ dollar holds gains on improved dairy, bank capital outlook
MARKET CLOSE: NZ shares gain; banks rally on Reserve Bank capital decision
NZ dollar rises; bank capital rules less harsh than expected
RBNZ relaxes capital requirements, allows preference shares, extends phase-in
NZ dollar extends gain amid mixed US data, possible trade progress
MARKET CLOSE: NZ shares dip on eve of major regulatory decisions
NZ dollar sees off global headwinds, holds above 65 US cents
NZ dollar holds above 65 US cents; dairy auction prices mixed
Dairy index falls on weaker butter, milk fat demand

IRG See IRG research reports