AFTA View – March 2012

What AFTA is doing for agents trapped in the middle of the Air Australia mess

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Jason WestburyWhat AFTA is doing for agents trapped in the
middle of the Air Australia mess

By Jay Westbury, chief executive Australian Federation
of Travel Agents


MY jaw dropped and I stopped in my tracks when I received an email advising that Air Australia had just gone into administration. My first and immediate thought was – WTF.

It was only mid-February and on the back of the adventures of the Costa ship in January, I could not believe that now we would also have to cope with an airline collapse.

At the time of the announcement I had no idea how significant the collapse would be in terms of the number of travelling passengers impacted and, worse still, the number of tickets sold.

Around 10,000 is what has been reported and regrettably, once again, travel agents are smack bang in the middle of the mess.

I have raised the many issues with the Federal Government, and more on that in a moment.

I have made representations to consumer affairs departments. I have made representations to the ACCC and ensured that any and all authorities that need to know have been made aware of how the travel agent in many many cases ends up having to deal with the mess. And in some cases the liability.

The ACCC will be looking to ensure that all concerned meet their responsibilities under the Australian Consumer Law and there is no question the principle responsibility sits with the directors of Air Australia.
CASA, ASIC, and anyone else that can, should – and I hope will – enforce the relevant laws to the full.

Travel agents did not have control over the airline and all of the responsibility for this collapse sits with the people who were in charge of it.

Meanwhile consumers, clever travel agents and wholesalers commence the process of credit card chargeback as realistically this is the only remedy for some affected people to get back their money.

Travel agents that acted as the merchant in the transaction will once again cop the liability. If they did not acquire tickets on the agency credit card they will end up on the creditors list with many many others.

If the reports of the airline only having $440,000 in the bank are true it is hard to imagine how it went on as long as it did.

AFTA has taken this issue very seriously and raised concerns directly with the Federal Government about the future governance, checks and balances that need to be enforceable for any new start up airline in Australia.

Tourism Minister Martin Ferguson has agreed that the issue will be placed on the agenda of an important tourism/aviation committee which AFTA attends.

It is also apparent that there are not enough powers in place to ensure that identifiable consumer funds held in trust must be returned to consumers or their agents prior to the administrators seizing them.

This will also be an issue which we will take up directly with the Federal Government.

Jay Westbury’s AFTA View column appears monthly.





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