Air New Zealand has backed down and agreed to refund its customers whose flights would've been transiting through the US.
It follows a Commerce Commission complaint laid by the consumer watchdog after the airline went against US aviation laws by not refunding all cancelled US flights.
"Where a cancellation is out of the control of the consumer, that consumer should be refunded for the flights - so this is US law," said Jon Duffy of Consumer New Zealand.
Instead, many transiting through the US were offered a credit, leaving thousands out of pocket - one by as much as $18,000.
But in a statement, Air New Zealand said it had been refunding the majority of transiting flights through the US, with the exception of NZ1 and NZ2 flights to London.
From Monday, those customers will also be provided a refund on request.
But it's little comfort for many other customers plagued by COVID-19 cancellations despite it being a win for some.
Jennifer Moss' son Jack Veale and his partner Charlie spent more than $5000 on flights from Germany to Auckland at the end of last month. They were due to depart on June 2, but their flight was cancelled last week.
After pleading for a refund, they were only offered a credit to re-book, but time is running out.
"We just feel let down by our national airline," Moss said.
"The next flight isn't until July the 1st, and in the meantime Jack and Charlie's flat - the lease has expired - the next tenant is coming in and they've run out of money."
Air New Zealand says customers are initially offered a credit but will be refunded where local legislation requires. Just like in the US, those rules also apply to flights in and out of Europe.
