The Commerce Commission has accepted a settlement with Singapore Airlines Limited that highlights an industry-wide problem - promotions of holiday packages are often wrong and risk breaching the Fair Trading Act.

Commission Chairman Peter Allport praised Singapore Airlines for responding immediately to the Commission's concerns by changing its offer of "Sun Vista Cruise" packages and providing refunds.

"However," Mr Allport said, "it is a significant concern that a major international airline published incorrect advertisements in newspapers nation-wide in the first place.

"Potentially misleading travel promotions appear to be an increasing problem and more investigations are likely. At the moment we are looking at three other companies' promotions and are receiving many enquiries about travel promotions in general."

The most common problems are that travel packages are not available at the advertised prices and significant conditions are not disclosed.

Importantly, if advertising or other promotional material is false or misleading, then correcting it at the point of sale is not a defence.

"Once people have been attracted by misleading information they are more likely to buy, even at a higher price and that disadvantages the customer and competitors," Mr Allport said.

"The Commission accepts that Singapore Airlines actions were not deliberate, but again that is not a defence. The Act puts responsibility on businesses to ensure that their promotions are not false or misleading."

Singapore Airlines advertised its Sun Vista Cruise package for $1,799 as available for sales until June 30 and travel up to October 30. However, the package was available at that price for departures between 16 September and 24 October only. For other dates the costs were higher.

Singapore Airlines has given the Commission signed undertakings:

  • that everyone who bought a Sun Vista package before July

    and paid more than $1,799 will be refunded the

    difference;

  • that anyone who bought a Sun Vista package before July

    will pay the $1799 price regardless

    of when they travel;

  • to introduce a written compliance programme to ensure

    future compliance with the Fair Trading Act including

    regular staff training, use of appropriate checklists and

    a system to track and report on complaints; and

  • to report back to the Commission on the refunds and

    compliance programme.

Examples of cases in which the Commission prosecuted and

courts fined companies include:

  • The advertised prices for airfare and accommodation

    packages were not available. In that case the advertised

    prices were half the twin-share prices. Prices for one

    adult were higher than those advertised, and twin-share

    prices were twice those advertised. No packages were

    available at the advertised prices.

  • A cruise was described as including "free"

    airfares from New Zealand to Sydney to meet the ship.

    However, Australian passengers were charged about $500

    less. The flight to Sydney was, therefore, not free.

Media contact: Communications Officer Vincent Cholewa

Phone work (04) 498 0920

Commission media releases can be viewed on its web site www.comcom.govt.nz