According to new reports, travel agents in Australia could be set for a financial downfall. This news comes after a Federal Court said that airlines should be forced to pay one million in additional ticket commissions.
Following a class action involving 1,450 agents last year, the Court did rule that airlines operating out of Australia were not obliged to included fuel surcharges when calculating the commission paid to agents on international ticket sales. The decision was challenged by Leonie’s Travel on behalf of the agents.
Leonie’s reduced the scale of the claim, appealing against Qantas for commissions which should have been paid out on airline tickets sold between 2004 and 2007. The Federal Court overturned the previous decision, finding fuel surcharges were not a tax and as such should be made commission-able. Thus, this leaves airlines like Air New Zealand, Cathay Pacific, British Airways, Singapore Airlines, and even Malaysia Airlines open to huge liabilities.
Slater and Gordon lawyer Steven Leis, who was representing the travel agents, said that the case set a precedent and argues the decision could have major implications across the airline industry. He continued that the court has made a ruling that fuel surcharges are part of the ticket price on which commissions must be paid.
Leis also said that the matter was run as a test case to establish the law as it applies to Qantas and the other airlines involved in the class action. The time has now come for the airlines, which have been using the fuel surcharges to bolster the bottom line since it was introduced back in 2004, to stop fighting the travel agents and resolve this major problem, he added.