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Questions and mysteries as Bestjet fiasco bubbles on

January 14, 2019 Headline News 1 Comment Email Email


The Bestjet collapse remains much in the news with allegations of a startling surprise in the minutes of the first creditors’ meeting and questions about whether major international airlines such as Emirates and Singapore Airlines will honour bookings made through Bestjet.

Virgin Australia’s website contains the following information:

TRAVEL ALERTS 

Information for Bestjet bookings 

As a result of Bestjet being placed under administration, guests who have booked Virgin Australia flights through Bestjet may have changes to their booking. 

Guests who booked through Bestjet on or post 30 October 2018 for travel on Virgin Australia flights from 1 February 2019 may be impacted and are advised to contact our Guest Contact Centre on 13 67 89 to check the status of their booking. 

We have been advised that guests who booked through Bestjet on or prior to 29 October 2018 or who have booked to travel on Virgin Australia flights prior to 1 February 2019 should not be impacted.

The significance of 30 October 2018 is unclear, given that BSP is weekly or fortnightly.

Rumours in the industry suggest that hundreds of Bestjet bookings for travel over the next few weeks are unlikely to be honoured by international airlines.

Given the elimination of the Travel Compensation Fund (TCF) and travel agency licensing, it was inevitable that recent collapses such as Bestjet and Venture Far would occur. Others will follow; it’s just a matter of time. The surprising factor in the Bestjet case is the size of the collapse.

Bestjet victims are wondering where state consumer ministers stand on the issue and who will take responsibility for this mess. Consumers in the Bestjet and Venture Far collapses, and other earlier collapses, would all have been protected had the TCF still been in operation.

The Bestjet collapse has left an estimated 10,000 customers out of pocket, with creditors owed AUD 7 million – a figure that’s expected to soar.

Nine.com.au, which has paid particular attention to the Bestjet case, has reported that Bestjet founder Rachel James “still appears to be living the high life” despite the problems and losses faced by Bestjet customers.

Rachel James sold Bestjet to McVicker International six weeks before it collapsed.

Rachel James helped found Bestjet in 2012, weeks after her husband Michael James’ international budget airline, Air Australia, went under with debts of up to AUD 100 million.

Rachel James has blamed the new owners for the collapse of Bestjet, though McVicker International was in charge for a just a few weeks before the company went bust.

Nine.com.au says that according to the minutes of a 2 January 2019 creditors meeting, the administrator said former Bestjet owner Rachel James still had a 50% stake in the online travel agency after she sold it to McVicker International in November last year.

“There is evidence that 50% of the shares were held on trust for Mrs Rachel James,” the minutes state.

But creditors who attended the 2 January 2019 meeting allege Rachel James’ 50% share was never discussed.

MEANWHILE, the Australian Financial Complaints Authority (AFCA), a free and independent ombudsman service, has offered Bestjet customers financial dispute assistance.

Screenshot from www.bestjetfiasco.org, a website set up to help creditors

A statement on the AFCA website says: 

Online travel agency Bestjet Travel Pty Ltd (Bestjet) entered voluntary administration on 18 December 2018. The Australian Financial Complaints Authority (AFCA) has published information for affected customers.

“This is a peak period for families and individuals going on holidays and we know that many people have been affected by Bestjet’s collapse,” said AFCA CEO and Chief Ombudsman David Locke.

“We want to make sure that these customers know what they can do to try and recover their payments to Bestjet.”

“We understand that some Bestjet customers have either not received their airline ticket, or have had their ticket cancelled. Depending on how you paid for your airline ticket, there are different courses of action to get your money back,” continued Mr Locke. “If you’re not sure whether your ticket is valid, you should contact your airline to get confirmation.”

If the ticket was purchased using a credit card 

Customers that purchased their tickets via credit card may be able to get their money back by asking their financial institution to “chargeback” the transaction.

A chargeback is a process of reversing a charge made on a cardholder’s credit card account.

Credit card schemes (e.g. Visa, Mastercard and AMEX) have rules outlining when a transaction can be charged back. One reason can be when goods or services are purchased but are not provided by the merchant, such as in this case.

Time limits do apply to when a chargeback can be raised. The time limit is usually 120 days from when the customer becomes aware the merchant will not provide the goods or services they purchased.

We recommend that you check the time limit for your credit card company directly to ensure you act within the appropriate time limits.

We also encourage all customers who purchased tickets from Bestjet by credit card to contact their financial institution as soon as possible to request the chargeback. Customers should note that it can take 4-6 weeks for the outcome of a chargeback to be finalised.

For customers who are unhappy with their financial firm’s response, the next step is to lodge a complaint with us online, via email or by telephone.

If the ticket was purchased using cash 

If the ticket was purchased using cash, customers may qualify as an unsecured creditor of Bestjet. For more information about what it means to be an unsecured creditor, please visit the Australian Securities and Investments Commission website.

Whether unsecured creditors receive their money back will depend on the outcome of Bestjet’s administration.

We encourage all customers who paid Bestjet by cash and have not received their ticket or have had their ticket cancelled contact Bestjet’s administrator, and complete a Proof of Debt or claim form.

If you have travel insurance 

Your travel insurance policy may provide cover for the insolvency or collapse of travel agents. Whether you are covered will depend on the policy type and wording, including any applicable exclusions. If you have travel insurance we encourage you to contact your insurance company directly to ensure you have the correct information for your situation.

If you have raised a complaint with your insurance company but have been unable to resolve the matter, the next step is to lodge a complaint with us online, via email or by telephone.

Written by Peter Needham



Currently there is "1 comment" on this Article:

  1. Peter says:

    If a ticket was issued by an accredited agency for travel booked, regardless of whether funds were remitted via the BSP to the ticketing/plated airline, then the ticket MUST be honoured by the airline and allow the passenger to travel. That is is the risk that airlines take when extending a line of credit to an IATA accredited agency (giving ticketing authority.

    Surely that is clear.

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