Add one more to the list of failed lawsuits against commission-cutting airlines: A New York case brought in 2002 by Power Travel of Plainview, N.Y., has ended with a whimper, Travel Weekly has learned.
Power Travel agreed to the dismissal of the suit, said its attorney, Craig Briskin. He declined to elaborate and said details were confidential.
However, the agency, which sued American, Continental, Delta, Northwest and United in a class action, was hurt by the loss of three defendants to bankruptcy.
Unlike other suits triggered by commission cuts, the Power suit was not an antitrust case but rested on contract law. It claimed the airlines had breached an implied contract of good faith and fair dealing with ARC agents by eliminating commissions.
There had been some encouraging news for the agency along the way: In spring 2003 Judge Robert Sweet, in U.S. District Court, Southern District in New York, said the existence of commissions “is an implied term” of ARC’s agency contract, and so by paying zero commission rather than some commission, however small, the defendant carriers “are not in good-faith compliance” with the ARC contract.
The litigation was held in abeyance for part of 2003 while a class action launched by North Carolina agent Sarah Hall proceeded.
Two other cases have fallen by the wayside recently. In late 2004, Canadian agents dropped their 2-year-old class action due to costs and because their biggest quarry, Air Canada, went into bankruptcy. In mid-2005, 30 Ohio agencies that had filed an antitrust suit against seven airlines withdrew their 2-year-old suit with a view to watching the outcomes from other similar suits.
Two suits remain in federal courts in Beaumont, Texas, and San Francisco on behalf of about 120 agencies.
To contact the reporter who wrote this article, send e-mail to Nadine Godwin at [email protected].