Cheap-fare ads sought 'quick decisions'

Air New Zealand's controversial cheap airfare advertising was designed to induce quick decision-making, a marketing professor has told the Auckland District Court.

Associate Professor Sarah Todd was giving evidence yesterday for the Commerce Commission, which is prosecuting the airline for allegedly breaching the Fair Trading Act in its cheap airfare newspaper advertising.

The commission said Air New Zealand misled customers when it advertised cheap airfares without properly showing extra fees, surcharges and add-ons.

The airline is facing 20 sample charges of breaching the act, after the commission says it broke the law in 355 newspaper advertisements.

Todd took issue yesterday with Air New Zealand experts' claims that buying airfares was "high involvement", which meant consumers took extra time to study and research their decision.

The layout, design and the presence of the Air New Zealand brand name on newspaper advertisements indicated "these were bargain fares that should be pursued without further consideration or delay", she said.

Todd said the claims by the airline's expert witnesses that travel was "high involvement" were too simplistic, since it depended on the consumer making the decision.

"For the typical consumers, it is just as reasonable to argue that flying has become a relatively commonplace part of holidays and business.

"Use of terms such as 'sale', 'gotta go' and 'buy now' are all commonly considered to induce quick decision-making among consumers, creating a pressured atmosphere with the implication that, if they don't act right away, they may well miss out on a 'bargain' purchase'."

The actual pricing strategy involved - with prices ending in the number 9, was common, since there was often a psychological threshold that consumers would not cross.

Todd is due to be cross-examined by Air New Zealand lawyer Nathan Gedye today, then both sides will sum up their cases to Judge Stan Thorburn.