Jetstar has been hit with a record NZ $2.25 million fine in New Zealand after the airline misled thousands of passengers about their rights to compensation for cancelled or delayed flights.
The penalty, handed down at Auckland District Court on Monday, 2 September 2025, follows a Commerce Commission investigation into breaches of the Fair Trading Act.
Court Weighs Discounts and Uplift in Penalty Calculation
Judge Brooke Gibson sentenced the Qantas-owned carrier on 20 charges relating to misleading conduct between 2022 and 2023. Jetstar faced a potential penalty of around $2.5 million but received a 25 percent discount for its early guilty plea and a further 10 percent for having no previous convictions in New Zealand. However, those discounts were offset by a 25 percent uplift applied due to the airline’s size and financial capacity.
The final fine of $2.25 million is one of the largest ever imposed under the Fair Trading Act.
Misleading Conduct and Customer Refunds
The case centred on Jetstar wrongly advising passengers that compensation was capped or limited when flights within its control were disrupted. This contradicted New Zealand law, which entitles passengers to reimbursement for “reasonable costs” such as meals, accommodation, and transport to their destination — up to ten times the cost of their ticket.
As part of its response, Jetstar refunded more than NZ $1 million to around 2,700 affected customers.
Vanessa Horne, general manager for competition, fair trading and credit at the Commerce Commission, said the conduct was “serious, widespread and deserving of one of the biggest penalties ever imposed under the Fair Trading Act.”
“Our investigation found that the misleading practices were the result of embedded shortcomings in Jetstar’s internal policies and instructions, which enabled staff to decline legitimate claims to compensation,” she said.
Consumer Impact and Commerce Commission Position
The Commission stressed the wider impact of Jetstar’s failings, pointing to New Zealand’s reliance on air travel.
“Airline travel is an essential service and given the lack of options in NZ, it’s crucial that airlines act fairly and responsibly. It can be incredibly stressful having your travel plans cancelled in these situations and it’s essential that transport providers give consumers clear and accurate information about their rights if delays and cancellations happen,” Horne added.
Jetstar’s Response and Remedial Actions
Jetstar acknowledged its conduct was “reckless”, though not deliberate. In a statement, the airline said it accepted the court’s decision and took “full responsibility for the frustration, stress and financial impact” caused.
“Over the past two years, we’ve reviewed thousands of past claims and contacted customers impacted by these errors to ensure they receive the compensation they’re entitled to,” the airline said.
It confirmed that changes had been made, including updating its website, improving staff training, and strengthening its claims review process. “When things don’t go to plan, our customers can have assurance they will receive the compensation they’re entitled to.”
Regulatory Significance and Industry Warning
The record penalty serves as a warning to other large companies.
“The Commission’s action has prompted Jetstar to put money back in the pockets of affected consumers and, crucially, secured a record penalty, which should serve as a strong deterrent to other large businesses,” Horne said.