Steve Jones’ Say for February 2019

BUSINESSES don't get any murkier than Bestjet. And I'm afraid it's another grubby stain on the reputation of the travel industry.

BUSINESSES don’t get any murkier than Bestjet. And I’m afraid it’s another grubby stain on the reputation of the travel industry.

Regardless of where the blame lies — and I think we have a good idea where that is — the industry has again faced with the very public fall out of a major failure.

Every industry suffers its share of collapses. Where travel can often differ, of course, is the high profile emotional nature of the consumer stories. It resonates with the Iikes of A Current Affair which revels in the tearful tales of wrecked family holidays and elderly parents denied the joy of travelling to their daughter’s wedding.

Like it or not, Bestjet was part of the travel industry, and it’s the industry that must pick up the pieces. The reputational damage impacts everyone. Online agencies in particular will be seething at those responsible for the circus that ensued, and the damage to consumer confidence in the sector.

One of the most frustrating strands of this story is that none us should have been surprised at Bestjet’s unravelling. Did any of us truly believe that Michael James, the husband of Bestjet owner Rachel James, and the man behind the disastrous Air Australia debacle, was not involved in the business?

This, a man who had been disqualified by the Australian Securities and Investment Commission (ASIC) for “failing to act with care and diligence” as he drove his airline into financial oblivion.

The Australian Federation of Travel Agents certainly had its doubts, having kicked Bestjet out of the ATAS accreditation scheme in 2016 because of James’s association with the business.

It’s a shame the wider public weren’t aware of his behind-the-scenes involvement. I can’t imagine many consumers would have booked flights with this company had they known its ownership structure.

What is equally frustrating is that a thorough investigation into the shady dealings at Bestjet might never happen. That would be scandalous in itself. But for starters, administrators Pilot Partners indicated they have little financial resources to delve much deeper into the various business activities of Bestjet.

And then we have the business regulator, ASIC. Frankly, I have little faith in them. Shortly before Christmas, a financial services royal commission identified what we knew. ASIC has failed to keep the big banks in line. If it didn’t take a stand against dubious practices from the likes of NAB, is it really going to spend the time and money investigating the failure of what, in the grand scheme of things, is a small online travel agent?

It’s hard to know what structural changes can be made to avoid the kind of negativity we’ve experienced with Bestjet. The Travel Compensation Fund kept many unsavoury headlines to a minimum. But that is long gone.

The best AFTA, and the wider industry can do, is to keep banging the ATAS accreditation drum. Accreditation doesn’t meant companies are failsafe. But it would have spared many consumers the misery of the Bestjet collapse.


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