The Commerce Commission today warned people that promotions offering free airfares to Hawaii may have expensive strings attached.
Commission Fair Trading Manager Keith Manch said retailers must make sure they fully explain all the conditions attached to the airfares. If they do not, they are at risk of breaching the Fair Trading Act.
"The Commission has become aware that a new offer is being made to retailers in Christchurch involving free airfares to Hawaii. Whilst the retailers who might buy the packages may be aware of the true nature of the offer it is important that their customers are properly informed too," Mr Manch said.
"We understand this offer is being promoted as a pre-Christmas special, with flights available between 29 February and 1 June next year. While not wanting to put retailers off using such offers to sell their goods and services, the full details of what is available and the potential costs and restrictions must be described to customers."
The Commission is concerned about travel packages that claim the airfares are "free" but the price customers have to pay for the accommodation is so high that it also pays the airfare.
These types of packages will often have strict conditions attached which also make it very difficult for customers to actually take advantage of the travel. Additionally, the success of such schemes relies on there only being a small number of consumers that take advantage of the offer. In Australia a similar scheme collapsed leaving many people out of pocket.
The Commission has contacted the major airline operating direct flights between New Zealand and Hawaii, Air New Zealand. Air New Zealand has not been approached to be involved in the packages being offered, and has made no special arrangements to supply the air travel to Hawaii for this promotion.
Last month, the Commission obtained interim injunctions against two Auckland companies, Air Australia Worldwide Marketing Ltd and Tasman Charter Flights Ltd, offering similar packages directly to consumers. The court agreed with the Commission that consumers might be misled about what they were getting. Court action is continuing with the Commission seeking a permanent injunction.
Media contact:Vince Cholewa, Communications Officer
Phone work (04) 471 0180, home (04) 479 1432
Background information
Air Australia Worldwide Marketing was also selling airline vouchers to retailers to use as "free airline tickets" in promotions. The company has since gone into voluntary liquidation.
Last year the Commission took injunction proceedings against a third company, which was offering free travel packages to retailers. In that case the High Court found that retailers understood the airfares were not free and would not grant an injunction.
This earlier judgement does not deal with the Commission's area of concern, which is what happens when retailers pass the offer onto customers.
