Flight Centre denies price fixing claims

Flight Centre denies price fixing claims
By admin

Flight Centre has strenuously denied price fixing allegations levelled against it by the competition regulator and said it will “vigorously defend” its position.

The Australian Competition and Consumer Commission (ACCC) has launched legal action claiming Flight Centre asked Singapore Airlines, Malaysia Airlines and Emirates to agree to stop directly offering and booking their own international airfares at prices less than offered by Flight Centre.

The ACCC allege that on six occasions between 2005 and 2009 “Flight Centre attempted to induce competitors to enter into price fixing arrangements with it”.

The purpose was for Flight Centre to “maintain the level of commissions”, the ACCC said in a statement.

Flight Centre rejected the allegations insisting it had “legitimate discussions” with airlines to ensure it had access to all fares.

“For the past 30 years, FLT has built its reputation on making travel more affordable,” managing director Graham Turner said. “It is not in the business of making airfares more expensive and does not ask suppliers to raise prices or to withdraw fares.

“As an agent, FLT asks for adequate commissions from airlines and other suppliers and also reasonable access to all fares 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 are not disadvantaged.

“It appears from the documents that the ACCC has issued that it considers FLT somehow to be a competitor of the airlines whose product it sells, rather than an agent for those airlines.

“We will vigorously defend our position.”

The retailer was initially asked for information after it terminated a preferred agreement with Singapore Airlines in April 2009.

The dispute related to SIA’s “proposed change in commission rates and the airline’s failure to give customers access to certain fares at a competitive rate”, Flight Centre said.

The retailer said it provided full details to the regulator at the time and was unaware of the ACCC’s specific concerns.

“Despite numerous requests from Flight Centre, the ACCC has failed to explain the legal basis of its position or to describe the conduct it believed the company should desist from,” Turner said. “We also question why it took so long for the ACCC to launch legal action when it had all of the facts and was given all of the relevant documents more than two years ago.

“In recent media commentary the ACCC has indicated its enforcement area will be taking on more cases where the outcomes may be less certain. Presumably this is the case in this instance.”

A hearing will take place in Brisbane’s Federal Court on April 13.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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