Flight Centre sues web developer for A$15m

Australian-based travel company Flight Centre is suing an Irish software developer for nearly A$15 million (NZ$19m) for failing to deliver an internet fare database, booking engine and travel agent sales tool as contracted.

According to documents filed in the Queensland Supreme Court, Flight Centre is suing Datalex for engaging in misleading or deceptive conduct that caused loss and damage.

In late 2005 Flight Centre wanted an internet booking engine that would enable customers to buy Flight Centre travel products, and a similar application for its travel agents. Datalex submitted a proposal. ''Datalex is confident with our … proven product suite and industry expertise that we can deliver a solution to meet Flight Centre's … business requirements,'' its proposal said.

The company said its product was being used by large travel agencies such as American Express, Trailfinders and Thomas Cook. In November 2006 Flight Centre agreed to pay the company US$300,000 ($414,000) to document in greater detail what was required.

On June 28, 2007, Flight Centre signed a ''master licence and services agreement'' with Datalex to provide the database and booking engine, and the travel agent product. Datalex had said it could deliver within 12 months.

But Flight Centre alleges it subsequently discovered Datalex had no such existing products and their products were not being used by large travel companies. It says several severe defects in the travel agent sales tool were evidence the product was still being developed - a fact Datalex later conceded. Flight Centre also accuses Datalex of delivering the product late and without all the required functionality.

Three weeks ago Flight Centre terminated the contract, and began breach of contract proceedings against Datalex in the Queensland Supreme Court two days later. It is suing for US$5.3 million it paid to Datalex, and a further $9.35 million in ''wasted expenditure'' Flight Centre incurred.

A Flight Centre spokeswoman said the company could not comment as the matter was before the courts.