Travel Agents

Flight Centre’s Skroo at odds with ACCC over court verdict

Daisy Melwani

After losing its High Court battle with The Australian Competition and Consumer Commission (ACCC) over airfare prices yesterday, Flight Centre Travel Group (FLT) responds saying it welcomed the end of the long-running case, but was “disappointed that it reached this point”.

The High Court of Australia found against FLTagreeing with the ACCC that it had engaged in anti-competitive conduct, thus overturning the Full Federal Court’s 2015 judgement which delivered in FLT’s favour.

The High Court judgement was 4-1 in the ACCC’s favour, and the majority decision establishes new law on the application of competition law to agents.

FLT and ACCC will now return to the Full Federal Court in 2017 for an appeal hearing about whether the original $11 million penalty was excessive or inadequate.

FLT Managing Director, Graham Turner said in a statement released on the ASX the company was “pleased” the long-running saga had been resolved and respected the Court’s decision, but was “disappointed that it had reached this point”.

The ACCC’s initial test case alleged that FLT had engaged in conduct which amounted to attempts to control airfare prices on six occasions between 2005-2009.

“Flight Centre has sough to deliver cheaper airfares to the travelling public for more than 30 years and is not in the business of attempting to make airfares more expensive,” Turner said.

“As an agent that provides considerable advice and hep to the travelling public and extensive marketing for airlines, FLT asks for appropriate commissions from suppliers and also reasonable access to all deals that they release to the market.”

“This is a logical and natural business request for an agent to make to ensure the customers it serves on behalf of airlines are not disadvantaged.”

FLT said it will review the judgement, but did not believe there were any further implications for its business as it “adjusted its behaviour” before the ACCC initiated legal action against it.

According to Turner, the group had co-operated with the ACCC before it pursued legal action and offered to discuss any concerns with them, but the ACCC had rejected their advances.

“While the ACCC is well within its rights to test the law, we feel that this matter could have been resolved in a more amicable, timely and less expensive way,” Turner said.

“The ACCC’s willingness to pursue this case without discussion or negotiation is seemingly at odds with the approach it has taken in its recent dealings with the world’s largest online travel agencies.”

“This is evidenced by the OTAs, specifically Expedia and Booking.com, in relation to access to hotel deals.”

“This agreement allows these OTAs to continue to stop hotels from offering cheaper fares to the public via their websites than they were making available to those OTAs, but we expect the OTA agreement may now have to be revisited in light of the decision,” Turner said.

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