Qantas faces paying agents a fortune – tens of millions
Download this page in PDF format
Qantas faces paying travel agents many millions of dollars. The High Court has dismissed an application by Qantas to challenge a Federal Court ruling in May that it owes commissions to travel agents.
Slater & Gordon lawyer Steven Lewis, who represented the agents in the court action, says Qantas has short-changed agents for more than six years and “it is now time for Qantas to sit down with the agents and resolve this long-running dispute.
“Qantas has had its day in Court and its excuses for not paying the commission have been rejected by the Court,” Lewis said.
“The mum and dad travel agents, which make up the bulk of our clients, now need to be paid what they are owed and allowed to get on with their businesses.”
The Full Federal Court of Australia decision in May concerned Qantas failing to include fuel surcharges when calculating the commission paid to agents on international ticket sales. A full bench of the Federal Court ruled that Qantas should have included the fuel surcharge in its base figure for calculating the commission it paid to agents.
The court found that the surcharge was part of the fare determined by the airline, rather than a tax.
In a unanimous decision, justices Bruce Lander, Steven Rares and Anthony Besanko said they took into account a decision by the Court of Appeal in England, to maintain consistency in international aviation.
They quoted from a judgement delivered in 1757 which declared that mercantile law is the same worldwide. A decision in 2000 by the UK Court of Appeal was also cited, relating to interpretation of a contract between British Airways and British travel agents.
Qantas said at the time it was disappointed with the decision. Analysts said the decision could cost it tens of millions of dollars, though the figure has yet to be established.
As a result of the High Court decision last week, the case now goes back to the primary judge in the Federal Court, Justice Moore, to determine the amount of commission which is payable by the airline to travel agents.
In evidence to the Federal Court, Qantas said the cost of paying commissions on fuel surcharges up to 2007 would be more than AUD26 million. This figure will have increased considerably over the past four years, according to Lewis.
The victory is part of a class action by travel agents against Qantas, Air New Zealand, British Airways, Cathay Pacific Airlines, Singapore Airlines and Malaysian Airlines, which started in December 2006.
Michelle Silvers, Managing Director and Chief Executive Officer of Litigation Lending Services, which funded the case, said the win was a great victory for small business.
“For more than six years Qantas has been short-changing travel agents. This is a great victory that could have implications across the international airline industry,” she said.
In dismissing the application the High Court said the construction of the Passenger Sales Agency Agreement, the contract between airlines and travel agents, as determined by the Full Federal Court is correct.
Written by Peter Needham
Would be great to have an article directing the individual agent on the procedures in ensuring our claim. Thank you LD
Where is AFTA in all this? This Federation is supposed to be support its members….especially as the network owners prefer not to upset the apple cart.
all the airlines who did not pay travel agents commission on the fuel charges
need to be made to do so.