Misleading ads cost Air NZ dearly

Air New Zealand pleaded guilty to a total of 112 charges and agreed to pay fines of $600,000 on charges of misleading advertising yesterday.

But the gavel on the long-running case over the fine print in ads for cheap airfares won't finally come down until next week, when Auckland District Court judge Stan Thorburn will decide whether an agreement between Air NZ and prosecuting agency the Commerce Commission should be accepted by the court.

Under the agreement, tabled yesterday, Air NZ will pay fines of $600,000, plus $50,000 in costs.

A total of 352 ads were considered during the case, which centred on ads for cheap fares that did not set out clearly what extra costs, such as a fuel surcharge, were not included in the advertised fare prices.

In his original decision late last year, the judge criticised the use of "microscopic" and "minute" asterisks the airline was using to point consumers to the fine print where the full range of charges were detailed.

A fuel surcharge was an "operating expense", he ruled, and should have been included in the main or "headline" fare price. Air NZ says it has since "changed materially" its advertising in light of the case.