Air New Zealand is again under investigation over the credit card fees it charges passengers.
It is the second time in a year the airline has come under scrutiny for fees that could breach the Fair Trading Act.
The airline charges a $4 processing fee on all domestic bookings made by credit or debit card. That rises to $6 for trans-Tasman and short-haul Pacific flights, $12 for a trip to Bali, and $17.50 for all other international fares.
It charges the fees per person per flight, meaning a family of four flying return within New Zealand will be charged $32 for one credit card transaction. However, the airline pays only about 1 per cent of the total flights package to the processing bank.
So a family of four flying between Wellington and Auckland for $470 would get stung a further $32 in fees - of which the airline would pay just $4.70 to the bank in what is called a merchant service fee.
The Australian consumer watchdog, Choice, estimated last year that Qantas was making a profit of about A$100 million (NZ$123m) a year on credit card surcharges after merchant fees.
The Commerce Commission, the government watchdog in New Zealand, investigated Air New Zealand in early 2012, after receiving complaints about its credit card surcharges, but decided not to take further action. Now it is relaunching the investigation.
"The commission would be concerned if businesses were . . . misleading consumers about the purpose or pricing components of the fee," a spokeswoman said.
"Retailers will attract our scrutiny if they call a charge a ‘credit card processing fee' (or similar) that is actually designed to generate profit or cover non-credit card costs.
"[The investigation] will involve reviewing how the surcharge is calculated, including profits (if any), and the description of the surcharge."
Air New Zealand spokeswoman Brigitte Ransom said the airline was not aware of any Commerce Commission investigation.
It spent $20.5m on merchant service fees a year, and recouped only $19.1m from customers, she said.
Qantas subsidiary Jetstar charges similar fees. The commission has not yet decided whether to investigate it too.
The merchant service fee, which businesses face for accepting card payments, is negotiated between businesses and banks. In Air New Zealand's case, it is understood to be about 1 per cent of a transaction.
In Australia, new Reserve Bank rules will prohibit airlines and other retailers from charging more than the "reasonable cost of acceptance" from March 18.
The Reserve Bank in New Zealand has no authority over credit card charges. It is the Commerce Commission's duty to regulate them.
Both Air New Zealand and Jetstar offer alternative methods of payment to avoid the credit card fees, through direct debit banking, Airpoints or Travelcard, or online payment system POLi.
Banks have warned against using POLi as it poses a phishing risk by asking users for their log-in details.
Visa spokesman Andrew Craig said credit card companies were against retailers passing on the fee to consumers.
"Electronic payments offer retailers a faster, more efficient and more secure payment method, compared to cash and cheques, so consumers shouldn't be penalised for choosing to pay with a card."
- Fairfax Media