Pakistan airline PIA faces £400,000 compensation bill
- 19 November 2013
- From the section Business
Pakistan International Airlines has been told by the High Court in London to compensate two UK travel agents after it stopped paying them commission for selling its tickets.
The court ruled that the airline should pay them about £400,000 in compensation for tickets sold since 2010.
The airline was taken to court by ticket agent Riaz Hussain Syed.
He said PIA told him he should charge the passengers the extra money instead of getting it from the airline.
He said: "If the price printed on the ticket is £500 and I ask the passenger for £35 more, do you think he will pay me? PIA wanted us to charge them the money."
Mr Syed and fellow travel agent Anwar Malik, both of Walthamstow in east London, were awarded compensation by the court.
PIA spokesperson Mashood Tajwar said: "We lost this case for fuel surcharges, but we settled out of court with some of them."
Mr Syed, however, has disputed this. He is also chairman of the Association of Pakistan Travel Agents (APTA), which represents about 39 vendors across the UK.
He says many of his members wanted to go to court, but it would have have been very expensive.
He said: "We had no choice. We wanted to settle out of court, but they told us to get a judgment order if we wanted to be paid what we thought we should be paid."
Eleven APTA members have settled out of court with the airline. They include Kaleem Majid of Royal Travel in Manchester.
Mr Majid said: "We took a long-term view. PIA are good partners and there's a large Pakistani community here, so we sell a lot of tickets for them. We didn't want to get involved in legal wrangling over a long period of time."
Mr Syed said more than £20m was owed to his members and that they would go back to the Royal Courts of Justice to get it.
The airline has had financial difficulties. Last year, it had pre-tax losses of about eight billion rupees (£45m).
One of the reasons was that it had a high number of employees. In 2011, there were just over 18,000 staff for a fleet of just 40 aircraft.
It is not the only business that is suffering. India's Kingfisher Airlines was grounded last year because of a cash shortage.
Andrew Charlton, of consulting firm Aviation Advocacy, said: "We are seeing airlines change they way they do business. From baggage fees to code-sharing agreements, it's a natural part of the progression from moving from the good old days to modern times."
In the meantime, APTA has asked Pakistan's Prime Minister, Nawaz Sharif, to intervene in the row. He was approached during his visit to London last month.
APTA asked him to send a high-powered delegation to the UK to help to resolve the argument, saying its members did not want to travel to Pakistan because they were concerned for their safety.
You can hear more on BBC Asian Network at 13:00 and 17:00.