American Airlines and the Association of Retail Travel Agents have
filed formal objections to a proposed settlement in agents’
landmark antitrust suit against the major airlines.
The court filings, the first official objections to a settlement
agreement with Lufthansa, came just days before Judge W. Earl Britt
is scheduled to convene a hearing on the deal in U.S. District
Court in Raleigh, N.C.
ARTA’s formal opposition came after attorneys representing Sarah
Futch Hall presented details to its board during a meeting earlier
this month. The class-action suit charging the airlines with
conspiring to eliminate commissions was filed under travel agent
Rather than offering its support, as the attorneys had hoped,
the board voted unanimously to oppose the settlement, reiterating
the objections it voiced when the settlement was announced in
“We’re worried that this sets an awfully low precedent for the
other carriers,” said ARTA President John Hawks, who plans to
attend the Sept. 2 court hearing. The Lufthansa settlement includes
a bonus program that would pay agents as much as $100 when they
book with the airline.
It also would create a mechanism for agencies that went out of
business in the last five years to file claims for underpaid
American Airlines said its objection to the proposed settlement
is based on legal grounds the carrier believes the deal violates
In court filings, American argued that the Lufthansa deal would
constitute a joint action with travel agents to “reinstitute a
commission model that the competitive marketplace ended” and would
unfairly influence agents to steer business to Lufthansa.
American is one of the major carriers named in the antitrust
“In essence ... plaintiffs are using their class status to
demand and negotiate standard incentive-based compensation from all
other carriers,” American’s filing stated.
Under the judge’s guidance, plaintiff attorneys have asked the
Department of Justice to review the legal issues, according to Hall
attorney Bradley Coxe.
Coxe said he doesn’t believe American has any standing to object
to the settlement.
But ARTA, which represents two of the named plaintiffs, as well
as more than 3,000 agents, does have standing.
After its initial objections, ARTA had held off on any formal
opposition to the settlement to see if other airlines would move to
ARTA was told no other carriers have come forward, Hawks
More than 700 ARTA members have registered their objections to
In its Aug. 18 court filing, ARTA opposed several specific
points in the agreement, including minimum sales thresholds in the
second and third years of the three-year deal.
Agents would have to meet those sales levels to continue to
qualify for the bonus program.
The sales thresholds are “clearly designed to exclude the vast
majority of class members who are independent, neighborhood
Mom-and-Pop travel agencies,” ARTA argued in its filing.
“We want the settlement to be meaningful for small retailers,”
Although Hall’s attorneys have argued that the deal establishes
a basis for future business relationships between agents and
airlines, Hawks said it would be difficult for ARTA to accept any
settlement that doesn’t call for some direct compensation for
damages to agencies.
“Our board feels it has been burned enough by the carriers,”
Attorneys for Hall said ARTA’s objections would not affect their
presentation of the settlement to the court Sept. 2.
“I have not heard anything that leads me to believe that this is
not a good settlement for the class,” said Hall attorney Daniel
Despite ARTA’s now-formal opposition, Hawks stopped short of
saying that the organization might try to remove itself from the
class-action suit if the judge approves the deal over the
Said Hawks: “Our feeling is that this is our best shot.”