Airlines face pounds 60m damages claim

A HIGH COURT judge has barred airlines from describing passenger service charges (PSC) as "a tax", in a landmark ruling that could lead to an estimated pounds 60m damages claim from travel agents.

Mr Justice Timothy Walker said yesterday that the charge introduced by airlines as a separate payment on tickets, in April this year, was a way of increasing the fare for the passenger. He said the airlines were implying that the extra charge had come from the Government or the airports but not from them.

But in reality the airports had always charged airlines a fee relating to the volume of passengers on aircraft and it used to be included as part of the overall cost of the ticket. The judge said the effect on the travel agents of separating the PSC on the ticket was to reduce the proportion of the overall ticket price on which they receive commission.

Following the judgment against three major airlines - British Airways, Virgin Atlantic and Lufthansa - travel agents can now sue for the commission they lost. Lawyers said the total claim could amount to pounds 60m when calculations are made on the amount of lost commission.

The judge ruled that the three airlines were "not entitled" to require the claimants - the Association of British Travel Agents and the operators Jetset Europe, Majestic Travel and Phoenix Travel - to designate PSCs as a tax.