NEW YORK -- American Airlines Vacations is referring some agents to
bankruptcy court to recover commissions and deposits on Latin
America packages booked through the airline's in-house tour
operation.
Because American contracted out its Latin American program to
4th Dimension Tours, which filed for bankruptcy Jan. 24, the
airline tour unit is telling agents to go elsewhere for commissions
and refunds.
Some agents received a letter from American Airlines Vacations
stating, "We are unable to provide your agency with commission as
requested. Our South American supplier, 4th Dimension, filed
Chapter 7 bankruptcy last month.
"All money for South American bookings was handled by 4th
Dimension. Due to its bankruptcy, you must file as a creditor in
court against 4th Dimension to obtain your commissions."
Some agents, however, claim they didn't know they were dealing
with a third party when they booked the American Airlines brand and
that the airline is giving them the runaround.
Fakhra Khan, president of Winters World Travel in Chicago, said
she never heard of 4th Dimension Tours until she started getting
mail from the bankruptcy court.
"At no point did American Airlines Vacations advise us of 4th
Dimension Tours," said Khan, who is waiting for a commission on a
booking.
Similarly, Patti Shields, co-owner of Just Travel of Downers
Grove, Ill., is waiting for a $200 deposit on a honeymoon booking
she made shortly before the bankruptcy.
When she learned of the bankruptcy, Shields rebooked with
another firm. After many attempts to recover the deposit, she
finally paid her clients the $200 out of her own pocket.
Attorney Mark Pestronk said, "American Airlines Vacations is
liable for the commissions and cannot get out of the obligation
merely because its own supplier went out of business."
Thomas Messana, the attorney for the trustee of 4th Dimension's
bankruptcy case, said it was "surprising" that American was
referring customers to bankruptcy court.
"People thought they were dealing with American Airlines
Vacations, which had taken affirmative steps to make them think
that," he added.
Messana said agents could probably recover the commissions by
suing; however, as creditors in bankruptcy court, agents probably
will recover only a fraction of the amount.
Jane LaCourte, owner of Jane's International Travel in Brooklyn,
N.Y., didn't find out about 4th Dimension until she called American
Airlines Vacations in early February about documents for a Feb. 16
departure that was paid for Jan. 3.
LaCourte said she is owed a $2,642 commission, which she
normally would have received two weeks after payment.
"I should have gotten it definitely within a month," she said.
As of late March, she still had not received a return phone call
about her commission.
A spokesman for American Airlines said, "We will deal with
[agents] on a case-by-case basis. We want to work to get an
amicable solution for both sides."
Asked if an "amicable solution" meant paying the commissions
owed, he repeated, "We will work with them on a case-by-case
basis."