An Air Australia plane being towed to a hangar at Brisbane Airport after the airline collapsed. Picture: News Corp Australia
THE online travel agency set up by the wife of failed airline boss Michael James is at war with the Australian Federation of Travel Agents after losing its accreditation.
AFTA refused to renew Bestjet’s membership due to the apparent influence of Mr James on the discount airfares business which operates from a small office in Brisbane.
Bestjet was registered by Rachel James two weeks after the collapse of her husband’s Air Australia (formerly Strategic Airlines) with debts of $100 million.
The airline’s failure in early 2012, also left hundreds of travellers stranded overseas forcing them to rebook with other carriers to get home.
Failed airline owner Michael James shortly after the 2012 collapse of Air Australia. Picture: Annette Dew/News Corp AustraliaSource:News Limited
As a result of the debacle, the Australian Securities Investment Commission banned Mr James from managing a company for three years.
Mrs James denied her husband held a managerial role at Bestjet but worked as a “fares and pricing analyst” from November 2013 until December 2015.
However he was being copied in on emails about company business as recently as January.
Under AFTA’s rules, applicants who are managed or “influenced” by people involved in company collapses are not eligible for accreditation.
In an effort to stop AFTA’s decision being made public until an appeal could be heard, Bestjet sought a Supreme Court injunction against the federation but failed.
The court heard Mrs James believed the loss of accreditation would hurt the business and “diminish (Bestjet’s) reputation in the industry”.
Michael James may have cost his wife’s business its travel industry accreditation. Picture: News Corp AustraliaSource:News Limited
“AFTA accreditation is important to Bestjet’s trade because it signifies to customers, suppliers and distributors, that it is solvent.. and maintains high standards of service delivery,” the company submitted.
But in a 40-page ruling, Justice Peter Applegarth said “provisions which permit AFTA to disqualify certain participants from gaining accreditation might be argued to be reasonable and in the public interest”.
“Rules which guard against bad management and corporate collapses in the travel industry serve consumers and the public interest. The view may be taken that not every Phoenix should be allowed to fly,” wrote Justice Applegarth.
In conclusion, the Judge said his decision not to grant Bestjet’s application for an injunction should not be viewed as a win for either side.
“The parties’ rights will be determined at a final hearing if they are not resolved by agreement before then,” Justice Applegarth said.
Mrs James described the decision as “disappointing”.
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