Flight Centre loses price fixing case


Flight centreFlight Centre shares have fallen six per cent after the consumer watchdog won a price fixing case against it in the federal court.

The Australian Competition and Consumer Commission (ACCC) accused the travel agency of trying to induce three airlines to enter into price-fixing arrangements so it could maintain its commissions.

The ACCC claimed that on six occasions between 2005 and 2009, Flight Centre tried to persuade Singapore Airlines, Malaysian Airlines and Emirates to agree to stop directly offering and booking their international airfares – including over the internet – at prices less than what Flight Centre offered.

At 1200 AEDT Flight Centre shares were $2.87, or six per cent, lower at $44.54.

The company says it will consider appealing Friday’s decision as it awaits a court hearing to decide whether a penalty should be imposed.

Flight Centre MD Graham Turner said he was surprised and disappointed by the court ruling which would have implications for the travel industry and for many retailers and agents in other sectors.

“As an agent that provides considerable free advice and help to the travelling public, Flight Centre asks for adequate commissions from suppliers and also reasonable access to all deals that they release to the market,” Turner said.

“Having access to all offers is a logical and natural business request for an agent to make to ensure the customers it serves are not disadvantaged.”

During the court case, Flight Centre said it had suggested to airlines that they lower prices to stimulate demand.

The company had a “price beat policy” that states if a customer finds a cheaper airfare, the travel agent will beat it by $1 and give the customer a $20 voucher, but the policy created problems for Flight Centre when airlines sold tickets directly to the public at low prices.

The ACCC initiated the court action against Flight Centre in Brisbane in March last year, three years after requesting information from the company.


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