Travel agents today won a landmark battle over airline commissions on fuel surcharges. The final instalment of the long-running battle between agents and Qantas ended in the Federal Court this morning with a ruling that Qantas had breached contractual obligations. In their final judgment, appeal court judges Justices Lander, Rares and Besanko found that since the International Air Transport Association’s agency agreement, defines “fares applicable” as monies paid for transportation excluding third party charges and taxes, airlines did not have the right to exclude fuel costs from commissionable fares. Steven Lewis, practice group leader at law firm Slater and Gordon representing travel agents, said he believed the ruling to be a world first. “This is an important day for travel agents, not only in Australia but around the world. Since May 2004 travel agents have said they were entitled to be paid commission on airline fuel surcharges and the court has upheld this view,” he said. Qantas is unlikely to be given leave to appeal the case to any higher court, since the ruling draws on a 2000 UK case and the judges expressed a desire for international consistency.
The court must now decide how much commission will be paid back to agents and how. Five other airlines named in the original case will now have to decide whether to contest or accept this ruling. Only those agents opted in to the case, mainly independents, will benefit from the windfall, which is expected to run into the “tens of millions of dollars”, Lewis said. Any final pay-out is not expected until 2011.
