Action over Air NZ ads hits snag

The Commerce Commission has been dealt a legal setback in its pursuit of Air New Zealand over misleading airfare advertising.

Despite winning in 14 of 20 charges brought against the airline last year, the commission wanted to take the case further, appealing against the not guilty decision for the remaining six.

It was hoping that if successful, the appeal would result in a "clearer line being drawn for advertisers". But its appeal has failed to clear a district court procedural hurdle needed before it can go further.

Air NZ was convicted in November on charges of breaching the Fair Trading Act, when it ran airfare prices in newspaper advertisements that did not include extra surcharges, fees and levies.

Auckland District Court judge Stan Thorburn ruled against it on 14 of 20 sample charges, saying that fuel costs were an operating expense and "ought not to be separated out from a headline price".

He criticised the use of "microscopic", "minute" and "tiny" asterisks in the advertisements that pointed consumers to fine print on the true nature of extra charges.

Although only 20 sample charges were analysed by the court, the commission says Air NZ broke the law in 355 newspaper advertisements - a number it will use when it comes to arguing for a sentence.

If there is no appeal, the case can go to the sentencing stage, where a judge will decide what sort of penalty Air NZ should face.

A commission spokeswoman said the latest district court decision was being studied and "the next steps were being considered".