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The Commerce Commission has given KLM Royal Dutch Airlines a warning after the company mistakenly sold airfares to Europe for as little as $50 instead of increasing standard prices by that amount.
Nearly 650 tickets were bought at the reduced rate via KLM's New Zealand website on September 26.
In a report released yesterday the commission said KLM had advised the travel industry of a fare increase of $50 (economy class) and $100 (business class) but a data inputting error in Amsterdam resulted in the intended price increase becoming the total price excluding taxes.
When the error was discovered, KLM notified the travel industry, removed the offer from its website, cancelled bookings and began issuing refunds.
During the time it took to fix the error 649 tickets were sold and the company was at risk of breaching the Fair Trading Act if it did not uphold the offer, commission director of fair trading Adrian Sparrow said.
"The commission is concerned that KLM did not have better systems in place to deal with a situation such as this.
"The fact it took KLM more than four hours to take the offending price off its website is not acceptable.
"However, the commission accepts that the price listing was caused by a genuine mistake."
Mr Sparrow said many of those who bought the tickets had connections with the travel industry.
"The commission also notes that those consumers who purchased airfares are likely to have seen the correct fare of $2399 before they purchased their tickets and because the price they actually paid was extremely low, some may not have been misled, but instead knew or suspected they were taking advantage of an error."
Mr Sparrow said KLM had been sent a warning advising it to put measures in place to prevent similar errors.
"Although the commission will not be taking any further action against KLM," he said, "consumers can take private action under the Fair Trading Act or by going through the Disputes Tribunal should they wish to do so."
- NZPA
