Airlines lose Australian fuel surcharge case

Airlines lose Australian fuel surcharge case

Travel agents in Australia could be set for a financial windfall, following a Federal Court decision stating airlines should be forced to pay millions in additional ticket commissions.

Following a class action involving 1,450 agents last year, the Court has ruled airlines operating out of Australia were not obliged to include fuel surcharges when calculating the commission paid to agents on international ticket sales.

However, this 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 subsequently overturned the previous decision, finding fuel surcharges were not a tax and as such should be made commissionable.

This now leaves airlines – including Air New Zealand, British Airways, Cathay Pacific, Singapore Airlines as well as Malaysia Airline, all of whom were involved in the original case - open to huge liabilities.

Slater and Gordon lawyer Steven Lewis, representing the travel agents, said the case set a precedent and argues the decision could have major implications across the airline industry.

“The court has made a very clear ruling the fuel surcharge is part of the ticket price on which commissions must be paid,” he said.

“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 surcharge to bolster the bottom line since it was introduced in 2004, to stop fighting the travel agents and resolve this major problem.

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Following the decision, Mr Lewis said almost 85 per cent of $16.9 billion in international airline tickets sold in Australia between 2004 and 2006 came through travel agents.

In a statement Qantas said it was “disappointed” but would consider its position.