Junkets: Why Airlines Do It
Sydney Morning Herald
Thursday February 26, 1987
IN FEBRUARY last year the body of Bob Tanfield, a former executive of Continental Airlines, was found slumped in the front seat of his car on his property in Maryborough, Victoria. A hose connected the exhaust pipe to the car.
His suicide was the most dramatic event associated with the scandals over free airline tickets which saw the resignation of the Victorian Governor and the charging of some police in connection with the free tickets.
A document left by Tanfield told how his links with police helped him cultivate contacts in the business world.
Precisely what Continental's head office in Texas thought about the scandal is unknown. It is difficult to imagine that the carriage of a Victorian Governor would sell a single extra seat to a member of the travelling public on either side of the Pacific.
The cultivation of contacts and good will is valuable in the competitive international airline business. And while free tickets are still regarded as a legitimate promotional activity, some travel industry sources speak of a corrupt side of the practice.
It is, in fact, illegal to issue free air tickets in Australia without an agreement which specifies a return to the airline. The exception to this are inaugural flights, defined as being new routes or the upgrading of the aircraft type on an existing route. Corporate executives, parliamentarians, senior public servants, journalists and high-profile personalities are the typical beneficiaries of these practices.
But most common are legitimate "contra deals" under which, for example, a newspaper or TV station will receive, say, $300,000 worth of travel in exchange for an equivalent in advertising time or space. Thus TV crews making programs and station executives on business will be able to travel "free". Or sometimes the station or newspaper will offer an overseas trip as a prize in a competition.
Contra deals are also done between airlines and sports promoters who fly out their competitors. Thus a contra agreement might specify that the name of the airline be displayed on the 18th hole of a golf course as well as the airline receiving advertising in the official tournament program issued by the promoter.
Or a film or TV producer may agree to credit the airline ("In Australia Miss Bloggs travels by airline X") in which the size of the words and the duration of the credit (eg three seconds) are specified.
The Sydney Morning Herald, like all newspapers which cover travel, accepts free airline tickets. Travel articles based on the use of these tickets acknowledge their source, usually in a paragraph at the end of the story. Contra deals agreeing to "favourable" references about an airline in editorial copy are not permitted on this newspaper, since there is no guarantee that that will be the journalist's conclusion.
Free airline tickets are also issued to major corporate clients of an airline to encourage their continued use of that airline.
When an airline believes that travel by a prominent person will generate traffic into Australia, this is also regarded as a legitimate reason for a free ticket. This was the reason United Airlines issued a ticket to the Lord Mayor, Doug Sutherland.
Mike Merlini, the South Pacific regional director of United, believes Doug Sutherland "is a good promoter and would do some good for Australia and would therefore do some good for the traffic of United".
The Sutherland case is "a typical example" of a practice which "will help the city, help the country, help United and everyone should be very happy," he says.
Mr Merlini says he is sometimes approached by people who want free tickets and try to convince him that this can be useful to the airline. But sometimes people "get an inflated impression" of their importance and he turns them down.
Free tickets are also issued under "inter-line agreements", under which the executives of different airlines travel on each others' flights, usually for convenience. Airline employees can also benefit by getting a 25 per cent discount under similar agreements.
Corruption and abuse of the system is possible, as in any industry, Mr Merlini says. But safeguards within airlines such as his own are designed to guard against that.
"I don't have a drawer full of tickets which I can just give away free. You don't do away with the social security system of paying dole because you get a couple of people who are abusing it," he says.
In any case, it is difficult to abuse the system because the value of the ticket is charged against promotional budgets which have to be audited both locally and by head office.
Most in the spotlight, though probably only a small part of junketeering, are federal MPs who receive a free round-the-world air ticket for each three-year parliamentary term. Parliamentary committees, such as the Foreign Affairs and Defence Committee, also have their junkets from time to time.
Certain MPs are known by their colleagues to be prize junketeers, with one commentator noting that "for Senator X, it doesn't matter where the trip is to, as long as someone else is paying for it."
For MPs in marginal seats, however, junketeering is seen as a problem for re-election.
The unsavoury side of airline junkets, according to a source within the travel industry, occurs when employees of an airline make deals with people in advertising departments in media organisations for unofficial "contra deals".
© 1987 Sydney Morning Herald