No such thing as a free flight, Comcom finds

The Commerce Commission has warned Flight Centre about a promotional campaign that could breach the Fair Trading Act for telling people they could "fly for free".

The commission has issued warnings in relation to Flight Centre New Zealand’s advertising between May and September 2009.

The warnings were for Flight Centre’s “Fly for free” promotion, airfares not being available for the advertised price and the insufficiency of additional cost disclosure.

Flight Centre has been running the “Fly for free” promotion since June.

Its advertisements claimed: “We will beat any airline, web or competitor’s airfare quote or fly you for free.”

But the Commission’s investigation established that Flight Centre would in fact not beat any competitor’s quote. Small print and online terms and conditions meant Flight Centre would only beat quotes that were available to the general public – of the same travel product for the same class and dates – and were submitted to the Flight Centre in writing prior to booking.

Commission director of fair trading Adrian Sparrow said the small print fundamentally changed the meaning of the headline offer.

“Businesses need to make sure that headline statements accurately reflect what is being offered,” he said.

“New Zealanders love to travel and are always on the look out for deals that will give them the best value for money. Consumers need accurate information so that they can make informed purchasing decisions. This means that information about travel offers needs to be both accurate and adequately disclosed.”

The investigation also established that on one occasion Flight Centre had incorrectly advertised the price of an airfare, and on another had advertised a tour package of Thailand but failed to sufficiently disclose a ‘local payment’ of 20,000 Baht that effectively doubled the advertised price.

On yet another occasion, after technical issues with its booking system, Flight Centre displayed unbookable fares on its website without advising customers on its site that those fares were not available.

“Businesses must ensure that they clearly disclose all costs associated with a purchase at the time an offer is made. Any additional costs that are not adequately disclosed risk breaching the Fair Trading Act,” said Mr Sparrow.

“Businesses who gain customers through misleading advertising are also disadvantaging those businesses that are compliant.”
He expected Flight Centre would review its advertising and compliance systems to ensure no further breaches of the act.

Flight Centre New Zealand is part of Flight Centre Limited, an independent and Australian owned retail travel group with more than 1500 shops and businesses spread throughout Australia, New Zealand, Canada, USA, South Africa, India and the UK.