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Airline Agreement

The agreement between TAANZ and the international airlines that make up the international Air Transport Association.

TAANZ/AIRLINE AGREEMENT 

1st January 2007 

BETWEEN THE TRAVEL AGENTS’ ASSOCIATION OF NEW ZEALAND INCORPORATED  a society incorporated under New Zealand law having its registered address at Level 5, 79 Boulcott Street, Wellington New Zealand (hereinafter “TAANZ”) of the one part; 

AND  THE SEVERAL INTERNATIONAL AIRLINES listed in Schedule 1 being members of the International Air Transport Association (“IATA”) and participants in the IATA Billing and Settlement Plan – New Zealand (“BSP-NZ”) (collectively and individually “the Airlines”). 

BACKGROUND:

i)       The parties hereto acknowledge that the New Zealand travel industry  must operate with a high standard of business ethics and practice is maintained throughout the industry.

ii)      TAANZ has adopted a code of ethics and practice which requires all TAANZ Members to maintain a high standard of conduct in their relations with the public, principals, and other members.

iii)     Membership of TAANZ can be achieved and maintained only by applicants and members who meet and maintain stringent criteria related to premises, qualified staff and who are accepted for bonding under the Bonding Regulations of TAANZ (hereinafter called “the Bonding Regulations”).

iv)     The provisions of IATA Resolutions specify the qualifications required to be established and maintained by travel agents who are or who have applied to become IATA accredited agents under the IATA Passenger Sales Agency Rules – South West Pacific (hereinafter called “the Accreditation Criteria”).

v)      TAANZ has appointed an independent Chartered Accountant as its Bonding Authority (hereinafter called “the TAANZ Bonding Authority”) to determine the suitability of each applicant for membership and of each existing member of TAANZ for acceptance for Bonding under the Bonding Regulations.

vi)     The Airlines are Allied TAANZ Members.

vii)    The parties hereto desire to take action to improve the conditions under which members of the travel industry operate for their mutual protection and for the protection of their customers.

viii)   TAANZ has adopted regulations and allocated a sum out of the TAANZ Bonding Fund to provide a measure of protection to members of the public against the failure of TAANZ Members to account to principals for monies received directly by them for arranging travel, accommodation or related services (hereinafter called “the Consumer Fund”).

ix)     TAANZ has also set aside from the moneys held in the TAANZ Bonding Fund the sum of $650,000 to provide a measure of protection for the Airlines against the default of TAANZ Members in accounting to the Airlines through BSP-NZ for monies received from trading as agents of the Airlines (hereinafter called “the Airline Fund”).

xii)    The parties hereto wish to provide for protection of the Airlines against the default of TAANZ Members in accounting to the Airlines for monies received on their behalf, with flexibility to supplement such protection. 

DEFINED TERMS AND INTERPRETATION: 

Definitions:  In this agreement unless the context otherwise requires:

“ACM” means an Agency Credit Memo, an accounting tool used by Airlines to make adjustments to agent transactions, specifically to account for a reduction, in the amount due by an agent to an Airline.

“ADM” means an Agency Debit Memo, an accounting tool used by Airlines to make adjustments to agent transactions, specifically to account for an increase, in the amount due by an agent to an Airline. “Agent” means an IATA-accredited passenger sales agent participating in BSP-NZ

“Business Day” means a day (other than Saturday or Sunday) on which registered banks are open for business in Auckland New Zealand;

“Billing and Settlement Plan” or “BSP” means the method developed, administered and operated, on a global basis, by IATA for providing and issuing Standard Traffic Documents and of accounting and settling accounts between the BSP Airlines and passenger sales agents, as described in Resolution 850 of its IATA Passenger Agency Conference Resolutions and its attachments and in its Manuals issued consequential thereto, all as the same may be amended, withdrawn, revoked and/or replaced from time to time.

“IATA” means the International Air Transport Association, an association of airlines incorporated by Special Act of Parliament of Canada, having its head office at 800 Place Victoria, P.O. Box 113, Montreal, Quebec, Canada, H4Z 1M1.

“TAANZ Board” means the Board of TAANZ constituted pursuant to the TAANZ Constitution and Rules.“TAANZ Member” means an Agent that is a member of TAANZ for the purposes of this Agreement.

Parties:  Reference to a party is to a party to this Agreement and will be deemed to include its successors and permitted assigns. The Airlines are treated as one party unless the context requires otherwise. For clarity IATA performs certain functions in relation to this Agreement on behalf of the Airlines (for example, giving and receiving notices) but has no liability for any act or omission in its own right.  All dollar amounts are deemed to be New Zealand dollars, unless otherwise specified.  

IN CONSIDERATION of the mutual covenants and conditions herein contained IT IS HEREBY AGREED between the parties as follows

 

1.           This Agreement commences on the 1st of January 2007 and, continues until 31st December 2009 (“Initial Term”).  This Agreement may be terminated by either party with effect from the end of the Initial Term provided that the terminating party gives not less than three months written notice of termination.  If such notice is not given the term will be extended automatically for a further term of 12 months and subsequent terms of 12 months on a rolling basis (together, the “Subsequent Terms”), subject to either party’s ability to terminate the agreement in accordance with Clause 33. 

2.         At the commencement of the Initial Term TAANZ shall establish and maintain a fund of $650,000 (The “Airline Fund”) by depositing this amount into a dedicated and separately identified bank account. 

3.         The Airline Fund shall be administered by the TAANZ Board and will remain the property of TAANZ until paid to the Airlines pursuant to the terms hereof.

4.         The Airline Fund is established for the purposes of providing a measure of protection for the Airlines against default by TAANZ Members in accounting to Airlines participating in BSP‑NZ for moneys due to those Airlines on the sale of international air passenger transportation by TAANZ Members as agents of the Airlines.

5.         The individual Airlines and/or IATA acting on the Airlines behalf, shall advise the TAANZ Bonding Authority and the Chief Executive Officer of TAANZ, concurrent with IATA’s notification to Airlines, GDS’ and CRS’, (and acting in strict accordance with the requirements of the applicable IATA resolution set out in the Travel Agents Handbook) when a TAANZ Member defaults in making payment to the Airlines pursuant to the requirements of BSP-NZ or is otherwise suspected of or has committed an irregularity in so far as the requirements for settling or accounting for BSP payments or records is concerned.

6.         The amount that an Airline may claim against the Airline Fund shall be in respect of, and be limited to, the aggregate of unpaid BSP‑NZ sales of international air passenger transportation effected by the defaulting TAANZ Member or Members, in respect of such Airline, up to and including the date upon which IATA (acting in strict accordance with the requirements of the applicable IATA resolution set out in the Travel Agents Handbook), withdraws from the defaulting TAANZ Member all carrier identification plates supplied by the claiming Airline(s) and all Standard Traffic Documents supplied by BSP‑NZ.  Withdrawal of carrier identification plates and Standard Traffic documents must be completed no later than two working days after the Agent has been placed in default.

7.         No claim by any Airline against the Airline Fund shall be valid unless written notice of an intent to claim specifying the amount owed through the BSP to the Airline is received by TAANZ from the Airline within 60 days after the date on which IATA, acting in strict accordance with the requirements of the applicable IATA resolutions, withdraws from the defaulting TAANZ Member all carrier identification plates supplied by the claiming Airline(s) and all Standard Traffic Documents supplied by BSP‑NZ.  Withdrawal of carrier identification plates and Standard Traffic Documents must be completed no later than two working days after the Agent has been placed in default.

8.         An Airline shall not be entitled to claim against the Airline Fund in relation to moneys owing to the Airline pursuant to BSP by any defaulting TAANZ Member where such moneys are owing in respect of transactions in which the vendor travel agent is neither a TAANZ Member nor an Agent. 

 9.         Separate agreements known as the “OTOC/Airline Agreement” and the “Tier Three Agreement” exist between the Airlines and some TAANZ members (“the Wholesalers”) who are involved in wholesale sales of the services provided by the Airlines.  Under the terms of the OTOC/Airline Agreement and the Tier Three Agreement the Wholesalers are to put up their own fund to provide the Airlines with protection in the event of the Wholesalers defaulting in their obligations pursuant to BSP-NZ in respect to wholesale sales of international air transportation on the services of the Airlines.  These Agreements identify wholesale sales by reference to specific IATA numeric codes (and additional or replacement codes).  Such wholesale sales are not intended to be covered by the Airline Fund.  The protection for the Airlines in relation to BSP transactions which pertain to these wholesale sales is provided by the fund established by the Wholesalers under the terms of the OTOC/Airline Agreement and the Tier Three Agreement.  No claim shall be made against the Airline Fund, Airline insurance or Contingency Fund for reimbursement of moneys owing by a defaulting Wholesaler to an airline pursuant to BSP-NZ where the transaction is a wholesale transaction conducted on any of the specific IATA numeric codes.

10.       In the event that a TAANZ Member fails to account to an Airline or  Airlines for moneys due to be paid by it, affected Airlines shall be entitled to make a claim in accordance with this Agreement and such claims will be treated as follows:

10.1    Moneys owed to the Airlines against issued Airline tickets for international air passenger transportation and other Airline documents required to be accounted for to the Airlines through BSP‑NZ will be the subject of a claim on the Airline Fund in accordance with the terms and conditions hereof provided always that TAANZ has been notified of the claim in accordance with Clause 7, and the claiming Airline(s) has/have otherwise complied with all relevant provisions of this Agreement.  

10.2    Each claim by an Airline pursuant to paragraph 10.1 hereof shall take into account any amounts due and payable by an Airline to the defaulting TAANZ Member, or by the TAANZ Member to the Airline, in respect of transactions carried out prior to the date of the default and in relation to which claims have been notified to the affected party, including commission payments due, refunds, ADMs and ACMs and amounts payable whether through the BSP or otherwise where authorised by contractual arrangements.

10.3    Moneys collected by a defaulting TAANZ Member from or on behalf of a customer in respect of international air passenger transportation but in connection with which no tickets or other documents have been issued will be the subject of a claim on the Consumer Fund.

11.       The maximum aggregate amount payable to the Airlines in relation to  default by any one TAANZ Member shall be the sum of $200,000.00.  The maximum amount payable to the Airlines from the Airline Fund in relation to the defaults of all TAANZ Members in any one calendar year shall be the sum of $400,000.00.

12.       For the purpose of Clause 11 above,TAANZ’s obligations to pay claims from the Airline Fund shall be deemed to arise in the calendar year during which the default event giving rise to the claim being made on the Airline Fund occurs, not the year in which the claim is made by the Airline(s) if this is different. 

13.       When claims accrue for payment from the Airline Fund in any one calendar year the following regime shall apply in relation to replenishing the Airline Fund:

13.1    In the event that the total amount of the claims which accrue for payment in any one calendar year is $250,000 or less then TAANZ shall be required on the 1st day of the new calendar year to replenish the Airline Fund by paying the amount required to bring the fund up to the sum of $650,000.

13.2    In the event that the total amount of claims which accrue for payment in any one calendar year exceeds $250,000 then TAANZ may elect either:

13.2.1 to replenish the Airline Fund by paying the amount required to bring the fund up to the sum of $650,000.00.  If it elects to replenish the Airline Fund it shall do so on the first day of the following calendar year; or

13.2.2 to revert to an arrangement in the following calendar year whereby the protection available to the Airlines is provided by a reduced Airline Fund of $250,000.00 supplied by TAANZ and  Airline insurance with cover of not less than $400,000.00 in any calendar year as defined and described below.  The insurance cover shall be arranged by TAANZ and the Airlines together, and the premium shall be paid in equal proportions by TAANZ and the Airlines.  If TAANZ elects to take this option the following provisions shall apply:

a)         TAANZ will on the first day of the new calendar year establish the Airline Fund of $250,000 by paying such amount into the dedicated bank account to restore the Airline Fund to this amount.

b)         TAANZ will maintain the Airline Fund throughout the term of this Agreement in accordance with the terms of this Agreement.  The monies of the Airline Fund will be administered by the TAANZ Board and will remain the property of TAANZ until paid to the Airlines pursuant to the terms hereof.  The maximum liability of TAANZ to the Airlines under the Airline Fund in any one calendar year shall be $250,000.

c)         When claims accrue for payment from the Airline Fund in any one calendar year TAANZ will, on the first day of the new calendar year or as soon thereafter as it is possible to determine the amount necessary, replenish the Airline Fund and restore it to the sum of $250,000 to the end and intent that there shall be in each calendar year a fund of $250,000 available to meet claims on the Airline Fund arising during that calendar year.

d)         The provisions of clauses 3, 4, 5, 6, 7, 8, 9, 10, 11, 12 and 13 shall apply to the Airline Fund of $250,000 established pursuant to this clause in the same way and to the same extent that they applied to the Airline Fund of $650,000 established pursuant to clause 2 hereof. 

e)         TAANZ and the Airlines will arrange joint Airline insurance cover (herein referred to as “the Airline Insurance”) for the purpose of providing additional protection to the Airlines in respect of the default of any TAANZ Member in accounting to the Airlines for monies received in trading as an agent of the Airlines in accordance with the following conditions:

(i)         Cover under the Airline Insurance attaches only when the aggregate losses to the Airlines in respect of the said defaults of TAANZ Members to the Airlines exceed $250,000 in any one calendar year.

(ii)        The total cover available to the Airlines under the Airline Insurance shall be not less than $400,000 in the aggregate of all claims in any one calendar year, subject however to a limit of $200,000 in respect of the default of any one TAANZ Member.

(iii)       TAANZ undertakes and agrees with the Airlines that it will take all reasonable steps (including the institution of legal proceedings if so requested and funded by the Airlines) to make claims and effect recoveries under the Airline Insurance policy of monies due to the Airlines, in accordance with the terms of the policy, and that it will immediately account to the Airlines for all monies so received.

(iv)       TAANZ and the Airlines agree to take all reasonable steps to keep the Airline Insurance policy in place during the term of this Agreement and will do so as long as such Airline Insurance is available at a premium acceptable to the parties.

(v)        In no circumstances shall TAANZ be liable to the Airlines in the event of the insurer failing or refusing to pay out in respect of any claim made on the Airline Insurance unless such failure or refusal is due to non‑compliance on the part of TAANZ with any of the requirements which pursuant to this Agreement it is required to carry out.

(vi)             The provisions of clauses 4, 6, 7, 8, 9, 10, 11 and 12 hereof shall apply in relation to any claim on the Airline Insurance.  The intent being that where the words “the Airline Fund” appear in those clauses the clauses shall be interpreted as if the words “the Airline Insurance” were written in their place.

(vii)           The Airline Insurance shall be on an “occurrence” basis rather than a “claims made” basis.

13.2.3 In the event that TAANZ elects not to replenish the Airline Fund as provided for in clause 13.2 and TAANZ and the Airlines agree not to keep the Airline Insurance in place pursuant to clause 13.2.2(e)(iv) then TAANZ and the Airlines will make a genuine attempt to implement other suitable default protection arrangements and in the absence of those alternative arrangements being implemented prior to the expiry of this Agreement then TAANZ Members will revert to providing security to the Airlines upon the basis applicable to non‑TAANZ, IATA agents in New Zealand.

13.2.4 Any election under this clause 13 must be by 30 days notice in writing to the other Party. 

13.3    The Airlines may choose at the Airline’s own expense, to put in place additional layer insurance up to any value using the TAANZ/Airline Agreement as a basis for determining the ‘excess’ value to be provided under such insurance.

14.       TAANZ will settle an Airline’s claims against the Airline Fund, on a pro-rata basis where multiple claims are made, within 30 days of the parties agreeing upon the amount to be paid to that Airline, both of whom agree to act in good faith in agreeing and settling claims.  TAANZ’s obligation to settle claims is subject to the limitations on its liability herein specified.

THE CONTINGENCY FUND

15.       On the 1st of January 2007, and subject to the provisions of Clause 20 hereof, on the 1st of January of each subsequent year during the Initial Term hereof and any Subsequent Terms, TAANZ and the Airlines shall each pay into a fund to be known as the Contingency Fund the sum of $40,000.00. 

16.       The Contingency Fund shall be administered by a joint committee comprising equal numbers of representatives of the Airlines and TAANZ and shall be owned equally by the Airlines and TAANZ.

17.       All interest accruing on the Contingency Fund shall be added to and form part of the Contingency Fund.

18.       The Contingency Fund is to be built up over the Initial Term and during this period the Contingency Fund shall not be subject to any claims.  After the Initial Term up to one half of the monies accumulated in the Contingency Fund shall be available in any one calendar year for the following purposes:

i)          25% to meet claims by the Airlines when the right of Airlines to claim on the Airline Fund has been extinguished by virtue of the amount of claims for which the Airline Fund is to be answerable that calendar year having been exceeded;

ii)         25% for the purpose of reimbursing the Airline Fund when the loss incurred by TAANZ in relation to the defaults of any one or more TAANZ Member exceeded the amount recoverable by TAANZ from such Member(s)).

19.       For the avoidance of doubt the Contingency Fund is not to be available to extend the level of claims in relation to any one defaulting TAANZ Member above the sum of $200,000, which is the maximum amount for which the Airline Fund will respond in relation to claims against any one TAANZ Member.

20.       If in any year TAANZ should elect pursuant to Clause 13.2.2 hereof to reinstate the Airline Insurance as part of the protection to be provided to the Airlines the Contingency Fund shall be discontinued and any surplus funds held in the Contingency Fund shall be paid out to the Airlines and TAANZ.  When this is done the parties shall undertake an accounting to determine the financial benefits received by the Airlines from the Contingency Fund pursuant to the provisions of clause 18(i) hereof and the financial benefits received by TAANZ from the Contingency Fund pursuant to clause 18(ii) hereof.  The balance held in the Contingency Fund shall then be distributed in such proportions between the Airlines and TAANZ so as to equalise the financial benefits received by each from the Contingency Fund.

21.       If at the expiration of this Agreement, or if the Contingency Fund is otherwise discontinued, there is a surplus in the Contingency Fund then the surplus shall be divided between the Airlines and TAANZ after an accounting has been undertaken in the manner provided in clause 20 hereof. 

22.       The Airlines will encourage all Agents to apply for membership of TAANZ and in the event of any Agent failing for any reason to become and remain a member of TAANZ the Airlines will require such Agent to establish bonding or other security in accordance with the provisions set out in the Civil Aviation (Passenger Agents Commission Regime) Notice 1983 (“the Commission Regime Notice”) and in doing so the Airlines will have regard to the protection provided by TAANZ by its Consumer Fund and in addition the Airlines will require such Agent to provide protection for the Airlines against the default of such Agent in meeting BSP payments.  In assessing the amount of such protection the Airlines will have regard to the amount of the protection afforded to the Airlines by the Airline Fund.

INDEMNITIES

23.       SUBJECT to Clause 25(a) each Airline will severally indemnify a TAANZ Member which acts as its agent against liability incurred by such TAANZ Member under the Fair Trading Act 1986 or the Consumer Guarantees Act 1993, by reason only of any false representation, misleading conduct, unfair practice, or failure to comply with a statutory guarantee on the part of the relevant Airline and against any reasonable costs or expenses incurred by the affected TAANZ Member in defending any claim or action taken against it in respect of any such matter.  An Airline will only be liable for such costs or expenses incurred where (i) it has approved the expenditure in advance to the extent practical (ii) or the Airline has chosen to conduct such defence on the Agent’s behalf in its complete discretion.  For clarity, (i) failure by an Airline to comply with its obligation under this clause 23 does not constitute a basis for TAANZ failing to action a claim under clause 10, and (ii) Agents are obliged to take reasonable steps to minimise potential liability under the Fair Trading Act 1986 or the Consumer Guarantees Act 1993 (including contracting out of the latter where possible).

24.       SUBJECT to Clause 25(b), each TAANZ Member will severally indemnify the Airlines for which it acts as an agent against liability under the Fair Trading Act 1986 or the Consumer Guarantees Act 1993, incurred by such Airline by reason only of any false representation, misleading advertising or conduct, unfair practice, or failure to comply with a statutory guarantee, on the part of that TAANZ Member, and against any reasonable costs or expenses incurred by the affected Airline in defending any claim or action taken against it in respect of any such matter.  TAANZ Members will only be liable for such costs or expenses incurred where (i) it has approved the expenditure in advance to the extent practical (ii) or it has chosen to conduct such defence on the Airline’s behalf in its complete discretion.  For clarify, Airlines are obliged to take reasonable steps to minimise potential liability under the Fair Trading Act 1986 or the Consumer Guarantees Act 1993 (including contracting out of the latter where possible).  

25.       (a) In respect of a TAANZ member’s liability under the Fair Trading Act 1986, the TAANZ Member will only be indemnified by a relevant Airline to the extent that a contravention of that Act was due to reliance on information supplied by that Airline which the relevant Airline ought reasonably to have expected would be relied upon by the TAANZ Member, or was the result of a default of a servant or agent of the Airline engaged to provide services for or on behalf of the Airline which the relevant Airline ought reasonably to have expected would be relied upon by the TAANZ Member and the TAANZ Member took reasonable precautions and exercised due diligence to avoid the contravention and otherwise complied with the Fair Trading Act 1986.

            (b) In respect of an Airline’s liability under the Fair Trading Act 1986, the Airline will only be indemnified by TAANZ Members to the extent that a contravention of that Act was due to reliance on information supplied by the TAANZ Members which they ought reasonably to have expected would be relied upon by the Airline, or was the result of a default of a servant or agent of a TAANZ Member engaged to provide services for or on behalf of a TAANZ Member which the TAANZ Member ought reasonably to have expected would be relied upon by the Airline and the Airline took reasonable precautions and exercised due diligence to avoid the contravention and otherwise complied with the Fair Trading Act 1986.

            (c) The parties acknowledge and agree that in respect of claims under the Consumer Guarantees Act 1993, the “supplier” of services is liable if certain guarantees are not met and TAANZ agrees that the indemnities in clause 23 and 24 above will not apply in respect of any liability of a TAANZ Member arising under the Consumer Guarantees Act 1993, or under the Fair Trading Act 1986, by reason of that TAANZ Member failing to comply with the reasonable instructions of an Airline or any obligation or duty imposed directly on the TAANZ Member by either of those Acts or in respect of any act or omission on the part of the TAANZ Member.

26.       UNDER the Commission Regime Notice the Airlines are permitted to pay commission for the sale of international air passenger transportation only to their appointed Agents.  If an Airline is proved to have knowingly paid or knowingly authorised or sanctioned payments of commission (or remuneration in lieu of commission) on the sale of international air passenger transportation on its services directly to a travel agent or other entity who is not an appointed Agent of the Airline, that Airline shall be ineligible to claim against the Airline Fund or Airline Insurance or the Contingency Fund in relation to defaults by TAANZ Members for a period of 6 months from the date of the payment concerned.

27.       THE Commission Regime Notice imposes restrictions and conditions on how Agents may deal with commission paid to them by an Airline.  If an Airline becomes aware that any of its Agents is failing to comply with such restrictions and conditions, it will take appropriate steps to ensure that such Agent will in future comply with the restrictions and conditions.  If the Airline becomes aware that an Agent is continuing to breach the Commission Regime Notice the Airline will withdraw its Carrier Identification Plates from that Agent.  If the Airline fails to take such action against the Agent, the Airline shall be ineligible to claim against the Airline Fund or Airline Insurance or Contingency Fund in relation to a default by any TAANZ Member for a period of eight (8) months from the date the Airline first became aware of the said failure by the Agent.

28.       THE Airlines will reimburse to TAANZ within one month of receipt by the Airlines of an account therefore, one half of the fees and expenses of the TAANZ Bonding Authority and, in the event of the Airline Insurance being reinstated during the term hereof, one half of the Airline Insurance premium.

29.       (a)       DURING the term of this Agreement the existing remitting period of the BSP-NZ will not be altered for any group, class or individual TAANZ Member other than pursuant to the provisions of the IATA Accreditation Criteria applicable from time to time.

            (b)       ANY individual member of TAANZ shall have the option to elect from time to time a more frequent remitting period than the standard BSP-NZ remitting period in force as at the date hereof.

30.       UNLESS and until the Airlines are otherwise advised by the TAANZ Bonding Authority, the financial criteria to be applied by the TAANZ Bonding Authority in assessing Agents who apply to become, or are, bonded TAANZ Members shall be the IATA Accreditation Criteria and such other financial criteria as may be required from time to time by the TAANZ membership criteria and the Bonding Regulations, provided always that where any financial criteria applied by the TAANZ Bonding Authority are less rigorous than the IATA Accreditation Criteria, prior written agreement has been obtained from the Airlines.

31.       DURING the term of this Agreement, provided TAANZ has complied and continues to comply with the terms hereof, and subject always to the terms of paragraph 32(b) hereof, the Airlines will not require any TAANZ Member to give any other protection to the Airlines in respect of monies to be accounted for to the Airline in respect of BSP-NZ other than as may be required under or pursuant to the Accreditation Criteria which apply at the date of commencement of this Agreement unless agreed otherwise by the parties.  This provision shall not preclude TAANZ and the Airlines adjusting the protection required in relation to wholesale transactions which are outside the scope of this agreement.

32.       (a)       TAANZ agrees that the Airlines have the right to appoint an independent advisor to oversee the operation and administration of the Airline Fund and to review the financial information provided by TAANZ Members to the TAANZ Bonding Authority for the Bonding Authority’s consideration and assessment against the financial criteria referred to in paragraph 30 hereof.  The Airlines acknowledge and agree that all information which is made available to the independent advisor is to be kept strictly confidential by the independent advisor and is not to be disclosed by that independent advisor to any person other than IATA.

            (b)       WHERE on the basis of the financial information made available to the independent advisor, the independent advisor has a concern as to the financial viability of any particular TAANZ Member (such concern arising as a result of a consideration of the financial information made available to him when measured against the financial criteria referred to in paragraph 30 hereof) the independent advisor shall consult with the TAANZ Bonding Authority with a view to determining an appropriate course of action to be adopted in relation to such TAANZ Member to remove the cause for that concern and where no course of action acceptable to the independent advisor is settled upon, the independent advisor may recommend to the Airlines that they seek additional protection by way of security from the TAANZ Member in question.  If additional security is obtained by the Airlines such security will not take precedence over but will take priority after any protection provided to the TAANZ Bonding Authority for the benefit of the Consumer Fund.  The additional protection shall be taken for the joint benefit of the Airline Fund and the Airlines directly to the intent that 50% of any recoveries received or obtained by the Airlines pursuant to the additional protection will be applied towards reinstating the Airline Fund.

TERMINATION OF THE AGREEMENT

33.       After the “Initial Term”, this Agreement may be terminated by either Party by providing not less than 3 months notice prior to annual anniversaries.

34.       Any individual Airline may withdraw from participation at any time on 3 months written notice without affecting the continuance of the Agreement as a whole.

35.       Upon expiry or termination of this Agreement, or withdrawal of an Airline and the provisions of this Agreement relating to the receipt, processing, administration and payment of claims against the Airline Fund, the Contingency Fund and Airline Insurance shall remain in full force and effect until all claims in respect of defaults which have arisen against the Airlines, or the individual withdrawing Airline, prior to expiry or termination of this Agreement have been settled,

36.       Any monies remaining in the Airline Fund on the expiry of a period of 65 days after the settlement of all claims in accordance with clause 35, shall revert to TAANZ and the Airlines shall have no claim in respect of such monies or any part hereof.  While monies are held by TAANZ in the Airline Fund they may be invested on deposit at call with any Bank or Building Society.  All interest earned on monies held in the Airline Fund shall be the property of TAANZ.

37.       (a)       SHOULD there be any substantive change to the provision of IATA resolutions which have a bearing upon the dates by which claims must be made on the Airline Fund or Airline Insurance the parties hereto shall review this Agreement with the intent of making such changes as may be necessary to provide certainty as to the date by which such claims must be made.

            (b)       THE terms of this Agreement shall be subject to review by the parties as at each anniversary of the date of the Agreement taking effect provided however that in the event of the parties being unable to agree on a variation of any condition, that condition will remain in full force and effect until the expiry of the term hereof.

38.       Subsequent to its said date of commencement, this Agreement may be acceded to by other international airlines by their execution of a copy hereof and their provision of the same to TAANZ.  IATA shall hereupon notify all existing parties of such accession.  The protection to be provided to any Airline that accedes to this Agreement subsequent to its date of effectiveness shall be restricted to transactions ticketed with such Airline commencing one month after the date that it has acceded to this Agreement by executing a copy of the same and providing such copy to TAANZ. 

39.       IF at any time any dispute or question shall arise between the parties hereto touching the construction meaning and effect of this Agreement or any clause or thing herein contained or implied or the rights of liabilities of the several parties hereto or to this Agreement then the parties agree to give favourable consideration, without prejudice to their respective positions, to Alternative Dispute Resolution procedures.

DISPUTE RESOLUTION

40.       Notice:  Where any question, dispute or difference (“Dispute”) arises concerning the administration or interpretation of any provision of this agreement (except where this agreement otherwise provides), the party initiating the Dispute will provide notice thereof to the other party.

Negotiation:  The parties will actively and in good faith negotiate to achieve the speedy resolution of the Dispute by discussion.  If the Dispute is not resolved by discussion within [15] Business Days of the notice, the Dispute may be referred by either party to mediation.

Mediation:  If a Dispute has been referred to mediation then the parties shall endeavour to agree on a mediator and shall submit the matter in dispute to the mediator.  The mediator shall discuss the matter with the parties and endeavour to resolve it by agreement between the parties.  All discussions in mediation shall be without prejudice, and shall not be referred to in any later proceedings unless agreed to by both Parties.  The Parties shall each bear their own costs in the mediation, and shall each pay half the costs of the mediator.

Referral to Arbitration:  The matter in dispute shall be referred to arbitration if:(

a)              the parties have been unable to agree upon a mediator within 10 Business Days of the Dispute being referred to mediation; or

(b)              mediation has taken place and no agreement has been reached.

Arbitration:  The dispute or difference shall be referred to a sole arbitrator for resolution if the parties agree on one, or if they cannot agree on the appointment of an arbitrator within 10 Business Days an arbitrator will be appointed by the President for the time being of the New Zealand Law Society at the request of either or both of the parties.

No calling of the mediator:  Where the Dispute has previously been referred to mediation, the mediator shall not be called by either party as a witness, and no reference shall be made to the determination, if any, issued by the mediator in respect of the Dispute, during any subsequent arbitration on the Dispute.

Arbitration Act:  The Arbitration Act 1996 will apply in the case of any Dispute referred to an arbitrator in accordance with this clause 35 and the decision of the arbitrator will be final and binding on the parties.  All costs and expenses of the arbitrator will be borne equally by the parties unless the arbitrator decides otherwise.

Obligations continue:  Pending resolution of the Dispute, the parties will continue to perform their respective obligations pursuant to this agreement.

GENERAL

41.       Notices: Any notice or other communication to or by a party to this Agreement:

(a)       may be given by personal service, post or facsimile with a copy by email;

(b)       must be in writing, legible and in English addressed as shown below:

If to the Airlines

Address:                   

c/- International Air Transport Association Level 9, 43 High Street, Auckland, NZ
PO Box 1493, Auckland
Attention:                   Regional Manager AU, NZ and SWP Islands
Facsimile:                  (09) 379 8019
Email:                        kingj@iata.org 

 

with a copy to the relevant Airlines where practical or where the notice does not relate to all Airlines.

 

If to TAANZ

Address:  

Level 3, 79 Boulcott Street, Wellington New Zealand
Attention:                   Chief Executive
Facsimile:                  (04) 499 0786
Email:                         paul@taanz.org.nz
 

or to any other address last notified by the party to the send by notice given in accordance with this clause;and

 

(c)      is deemed to be given by the sender and received by the addressee:

(i)      if delivered in person, when delivered to the addressee;

(ii)     if posted, two Business Days (or six, if addressed outside New Zealand) after the date of posting to the address whether delivered or not;

(iii)    if sent by facsimile transmission, on the date and time shown on the transmission report by the machine from which the facsimile was sent which indicates that the facsimile was sent in its entirety and in legible form to the facsimile number of the addressee notified for the purposes of this clause but if the delivery or receipt is on a day which is not a Business Day or is after 5.00 pm (addressee’s time), it is deemed to have been received at 9.00 am on the next Business Day; or

(iv)    if sent by email, a the date and time at which it enters the addressee’s information system (as shown in a confirmation of delivery report from the sender’s information system, which indicates that the email was sent to the email address of the addressee notified for the purposes of this clause), but if the delivery or receipt is on a day which is not a Business Day or is after 5.00 pm (addressee’s time), it is deemed to have been received at 9.00 am on the next Business Day.

42.       Alterations: This agreement may be altered only in writing signed by each party.  For clarity, all Airlines must agree to such alteration. While IATA will give and receive notices on behalf of the Airlines, only the Airlines collectively may make such alterations

43.       Survival: Any term by its nature intended to survive termination of this agreement survives termination of this agreement.

44.       Waiver: A party does not waive a right, power or remedy if it fails to exercise or delays in exercising the right, power or remedy.  A single or partial exercise of a right, power or remedy does not prevent another or further exercise of that or another right, power or remedy.  A waiver of a right, power or remedy must be in writing and signed by the party giving the waiver.

45.       Confidentiality: A party may only use confidential information of another party for the purposes of this agreement, and must keep the existence and the terms of this agreement and any confidential information of another party confidential except where:

(a)       the information is public knowledge (but not because of a breach of this agreement) or the party has independently created the information;

(b)      disclosure is required by law or a regulatory body (including a relevant stock exchange); or

(c)       disclosure is made to a person who must know for the purposes of this agreement on the basis that the person keeps the information confidential.

46.       Force majeure:  Neither party is liable to the other for any breach or failure to perform any of its obligations under this agreement where such breach or failure is caused by war, civil commotion, hostility, strike, lockout, other industrial action, weather phenomena or other act of god, governmental regulation or direction, or any other cause or causes beyond that party’s reasonable control whether similar to any of the foregoing or not, but if such a party is, or is likely to be, affected by any such occurrence, such party will use all reasonable endeavours to overcome or mitigate the effects thereof as quickly as possible.

47.       Assignment: A party may only assign this agreement or a right under this agreement with the prior written consent of each other party.

48        Governing law and jurisdiction: This agreement is governed by the laws of New Zealand and each party irrevocably and unconditionally submits to the non‑exclusive jurisdiction of the courts of New Zealand.

 

The following airlines are party to the TAANZ – Airline Agreement  

  • Air Canada  
  • Air New Zealand 
  • Air Pacific  
  • Air Vanuatu 
  • Asiana Airlines
  • British Airways        
  • British Midland
  • Cathay Pacific
  • Emirates       
  • Garuda Indonesia   
  • Japan Airlines
  • KLM Royal Dutch Airlines
  • Korean Air Lines
  • Malaysian Airlines
  • Qantas Airways       
  • Singapore Airlines
  • Thai Airways International
  • United Air Lines