6th Apr 2018
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Flight Centre fined $12.5 million for price rorting
Flight Centre fined $12.5 million

Australia’s largest travel agency, Flight Centre Travel Group Ltd (FLT), has been fined $12.5 million after the Full Federal Court of Australia this week found it guilty of rorting airfare pricing systems.

The agency attempted to induce Singapore Airlines, Malaysia Airlines and Emirates into withholding airfares on their website that were lower than the ones offered by Flight Centre.

The price-fixing arrangement was initiated to ensure that Flight Centre ‘lowest price guarantee’ could be ‘guaranteed’.

Initially, FLT was asked to pay $11 million in 2014, but the Australian Competition and Consumer Commission (ACCC) pushed ahead with further charges and sought between $17 million and $20 million.

“The ACCC appealed from the initial $11m penalty orders because it considered that this level of penalty was inadequate to achieve a strong deterrence message for Flight Centre and other businesses,” ACCC Chairman Rod Sims said.

“Flight Centre is Australia’s largest travel agency, with $2.6 billion in annual revenue. We will continue to argue for stronger penalties, which we consider better reflect the size of the company, as well as the economic impact and seriousness of the conduct.”

Mr Sims hopes that the penalty will provide “a general deterrent to other businesses that may be considering such conduct themselves”.

“The ACCC wants to ensure that penalties for breaches of competition laws are not seen as an acceptable cost of doing business,” he said.

“To achieve deterrence, we need penalties that are large enough to be noticed by senior management, company boards, and also shareholders.”

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    COMMENTS

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    MICK
    7th Apr 2018
    5:09am
    Sort of suspected that so no surprise. When they did have to beat a competitor's price it was always around $5 less so a complete sham.
    Whilst we occasionally use FlightCentre and their other subsidiaries their method of advertising always appeared to be dodgy so we nearly always book elsewhere and/or direct,
    This is monopoly behaviour and the ACCC needs to force the company to sell off its other businesses which appear to operate as individual companies but which are anything but.
    A shame. Welcome to big business behaving as it normally does.
    Glen48
    7th Apr 2018
    9:46am
    The whole business of flying needs to be overhauled..Not much fun to find out the Dep.Tax was not paid and you need to find X just before you get on the plane,,were one airline tells you the baggage weight is different between flights,,web sites hard to follow....Advertised price are not the same once you look in to it..
    Trish
    7th Apr 2018
    3:04pm
    Several years ago I booked with Flight Centre, who charged me about $110 more than was advertised online. I commented on it, but the sales person said she had quoted the correct uptodate price. Next day, I looked up the website, to find they still quoted the cheaper price. Contacting the booking agent, emails and phone calls, I got nowhere. The original person who served me had 'left', couldn't be contacted, so I got nowhere again.

    Moral - avoid Flight Centre completely.
    GeorgeM
    7th Apr 2018
    10:51pm
    Good work by Rod Sims. More such actions needed.
    Maybe he should be appointed into a new role in ATO to enforce such penalties for tax avoidance by many companies and the wealthy!
    Hairy
    9th Apr 2018
    8:34pm
    Yes you get a price then look at another site then go back to original fare and it’s gone up in price . Nothing but one big con.


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