Agents Fight AA Memos

Complaint accuses carrier of ‘extorting money’ from agencies

By: David Peterkofsky

A Scottsdale, Ariz., travel agency is the lead plaintiff in a class-action complaint filed against American Airlines, in response to the carrier’s issuance of debit memos for tickets refunded following the events of Sept. 11, 2001.

The suit, filed Aug. 5 on behalf of All World Professional Travel Services in U.S. District Court in Los Angeles, accuses AA of racketeering and “extorting money” from the plaintiff and members of the class by forcing them to pay $200 per-ticket service charges for processing refunds on behalf of American passengers grounded in the days following Sept. 11.

The plaintiffs are seeking unspecified damages and relief for American’s alleged violation of the Racketeer Influenced and Corrupt Organizations Act.

The suit contends that, just after Sept. 11, the Department of Transportation issued a directive to all carriers ordering them not to apply “nonrefundability/penalty provisions” for tickets on canceled flights.

American initially authorized agents to process refunds for passengers through the Airlines Reporting Corp., the suit argues. The carrier later claimed that agents violated a rule barring them from doing so and demanded they pay the $200 per-ticket debit memos, which the airline issued in January 2002.

The airline also threatened to terminate the agents’ right to sell AA tickets as well, according to the suit.

More than 3,000 agency locations received the debit memos in question, according to an estimate in the lawsuit, but an attorney representing the plaintiffs said only All World Professional Travel Services is named in the suit.

American spokesman Tim Kincaid told TravelAge West the airline has yet to file its response to the class action, adding only that “we believe this suit and those allegations are without merit.”

Refund Requests

Earlier this year, Mary Ellen May, owner of All World Professional Travel Services, received $200 debit memos for four American tickets refunded just after Sept. 11. American later sent the debit memos, May was told, because she submitted the refund requests through ARC rather than by mailing them.

Soon after, American notified May that it had goofed and it reduced the debit memos to the value of the tickets, since they cost less than $200 each. The debit memos were adjusted to $100.50 per ticket.

In March, May wrote a letter to TravelAge West about the debit memos, and the letter caught the eye of attorney Linda Platisha, who contacted the Arizona agency owner and encouraged her to file suit. May has since heard from many other agencies hit with the same debit memos some agents got them reversed simply by calling the airline, while others are still fighting them, she said.

The inconsistency in American’s handling of the debit memos irks May, but so does the airline’s apparent inflexibility. As a show of good faith to the carrier, May remitted $25 per debit memo $100 in all to the airline until the matter is settled. American acknowledged the payment only by decreasing each outstanding debit memo by $25.

“The airlines were promising everything and anything when all of this was going on, trying to get people where they belonged and keep people happy,” she said of Sept. 11. “And then once things started settling down, the tune changed. It’s a shame they can’t stand by the decisions they made when everything was in a high emotional state.”

Platisha is urging other agencies that have received Sept. 11 debit memos to contact her at lplatishalaw for more information on the class action. American has until mid-October to file its response to the suit.

Platisha also hopes to hear from agents for another class action she has filed against American, one that represents agents who have received debit memos alleging their use of back-to-back and hidden-city ticketing.