Jetstar faces more legal woes, as New Zealand regulators launch court action alleging it misled travellers about their rights to compensation for flight delays and cancellations.

The NZ Commerce Commission said communications from the budget airline to passengers in 2022 and 2023 “likely discouraged them from seeking compensation”.

“Airlines have a responsibility to not mislead consumers about their rights in the event of cancellations or delays,” commission spokeswoman Vanessa Horne said on Wednesday.

“[NZ law] is clear that airlines have a responsibility to reimburse customers for loss caused by cancellations or delays on New Zealand domestic flights that are within the airline’s control.”

She said that likely included delays or cancellations due to staffing or mechanical issues.

Travellers were entitled to be reimbursed for reasonable costs caused by the delay, including for meals, accommodation, and anything else they had to pay to get to their destination – up to 10 times the cost of the ticket.

The commission alleges Jetstar likely made false or misleading statements to consumers about their rights in aviation law. It believes it also likely denied legitimate claims.

“The Commerce Commission expects large businesses to take their responsibilities under the law seriously – they must honour their obligations to consumers,” Horne said.

The Jetstar website allows people to resubmit claims for compensation that may have been incorrectly handled at the time. The commission urged any passengers who were eligible to submit to do so.

In a statement on Wednesday, Jetstar said it was co-operating with the NZ authorities and apologised for 2022 and 2023 errors about compensation.

“We’re deeply sorry to have let our New Zealand customers down by errors made in assessing some compensation claims for disrupted flights in 2022 and 2023, as our operations restarted following Covid,” it said.

“Since becoming aware of this issue, we’ve been focused on making things right for our customers and improving our communication and processes.”

The New Zealand action comes a month after a class action was launched against the budget airline in Australia over travel vouchers issued to hundreds of thousands of customers for flights cancelled at the height of the Covid-19 pandemic.

The lawsuit filed in the Federal Court claims Jetstar was legally obliged to refund tickets and seeks for the money to be returned directly to customers with interest.

“The right thing for Jetstar to do when it cancelled all those flights was to return its customers’ money without delay,” Echo Law partner Andrew Paull said in August.

“Jetstar customers were pushed into holding hundreds of millions of dollars in restricted travel credits, even though this wasn’t what those customers had agreed to as part of the airline’s terms and conditions.”

It also follows an agreement by Jetstar’s parent company, Qantas, to pay $120 million to settle allegations of misleading conduct over ticket sales on so-called “ghost flights”.

The case was brought by the Australian Competition and Consumer Commission, which alleged Qantas had advertised tickets for 8000 flights that had already been cancelled and that it had engaged in false, misleading or deceptive conduct by selling the tickets for an average of more than two weeks.

The consumer watchdog alleged Qantas failed to notify existing ticket holders for 10,000 flights that had been cancelled for an average of 18 days, and up to 48 days, between May and July 2022.