FLIGHT CENTRE FINED $11M FOR PRICE FIXING
Written on the 28 March 2014 by Laura Daquino
Flight Centre Travel Group (FLT) has been fined $11 million in the latest – and what could be the final instalment – of the company’s battle against the Australian Competition and Consumer Commission (ACCC).
Following a judgment handed down on December 6 last year, the Federal Court today declared FLT has repeatedly entered into anti-competitive arrangements with Singapore Airlines, Emirates and Malaysia Airlines to eliminate price differences in international air fares.
The case detailed the time frame of 2005 to 2009, where FLT operated under the tagline ‘Price Beat Guarantee’, and allegedly prevented these airlines from undercutting them on six separate occasions.
The Court voiced concerns about the implications of price fixing for not only the competition, but also the consumer.
“This type of corporate conduct carries with it aggravating, adverse consequences of denying a would-be passenger a lower fare for air travel which the airline supplies.”
Justice Logan said commercial profit was “undoubtedly the driver of the contravening conduct”.
FLT managing director Graham Turner said his company was comfortable to comply with the law, and will prohibit any further anti-competitive conduct of this kind, as well as paying part of the ACCC’s legal expenses.
However, FLT will consider appealing the penalties, in line with previously announced intentions to appeal the court’s judgment when it was delivered in 2013.
“This will clarify our position and rights as an agent, particularly in light of the contrasting ruling delivered recently in a similar Federal Court case involving the ACCC, ANZ Bank and its mortgage brokers,” said Turner.
Despite the fine, FLT continues to target a full year profit before tax (PBT) between $370 and $385 million, an 8-12 per cent increase on its record PBT achieved during 2012/2013.