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NWA sues agents, ex-rep for waiver code fraud

 

NWA sues agents, ex-rep for waiver code fraud
By Laura Del Rosso

http://www.travelweekly.com/articles.aspx?articleid=25851

SAN FRANCISCO -- Northwest Airlines is charging in a lawsuit that a former account executive and five local travel agents who specialize in ethnic markets conspired to defraud the airline by using waiver codes to evade advance-purchase and minimum-stay requirements.

The airline claims it suffered at least $900,000 in loss of revenue from the misuse of waiver codes and asks for punitive damages from the account executive and the agents, with the amount to be determined at trial.

 

The suit was filed in San Francisco Superior Court against Howard Yang, an account executive in San Francisco for the airline from 1981 to 1998, and five San Francisco agents: Edmund Jew, Ellen Gee and Terry Gee of Incentive Plus International Travel, and Rukhsana Dossani and Ashfaq Dossani of Five Star Travel Services.

The airline claims that Yang routinely issued waiver codes to the travel agents, violating the rules and regulations of the airline and the ARC agreement.

Clifford Hanson, an attorney representing the Dossanis, who own Five Star Travel, said he has filed a legal response for the Dossanis to the Northwest suit, denying all of the airline's claims that they acted improperly by using the waiver codes provided to them by Yang.

"As far as they are concerned, they did nothing wrong," said Hanson. "They asked for discounts from the airline and they got them. They were getting deals from a representative of the airline."

None of the agents with Incentive Plus could be reached for comment.

Yang's attorney, Alexander Anolik, claims Yang was "encouraged" by Northwest to issue the waiver codes, which he characterized as a "standard industry practice" to incentivize agents to move market share to an airline in a competitive environment.

Yang filed a cross complaint in early July, claiming Northwest authorized and encouraged him to issue waiver codes and that Northwest fired Yang without good cause, which led him to be denied retirement benefits.

A Northwest spokeswoman said the carrier would not comment on the suit and would "let the court papers speak for themselves."

Waiver codes are waivers that airlines issue "to remedy booking errors by Northwest or travel agents and to address specific circumstances," according to Northwest's lawsuit.

The airline claims that from February 1997 through April 1998, the agents "engaged in a practice of ticketing up to 90% of their Northwest bookings by improperly using waiver codes to waive advance-purchase and/or Saturday-night stay requirements."

Anolik said Yang routinely submitted reports to his superiors at Northwest reporting the issuance of waiver codes to the agents, all of whom were at the time in the business of selling airline tickets to the Asian ethnic market.

"I have never seen an airline go after a sales rep for something like this," said Anolik. "It's standard practice in the industry to give waiver codes to agents. There were no restrictions placed on him. He was basically told to go out and be aggressive and get the business."