Post by Banker on Mar 9, 2012 18:03:05 GMT 7
Flight Centre accused of price fixing by Australian Competition and Consumer Commission
AUSTRALIA'S consumer watchdog is taking one of Australia's largest travel agencies to court, alleging it tried to induce three airlines into price fixing.
The Australian Competition and Consumer Commission released a statement this afternoon saying it had started proceedings against Flight Centre Limited in the Federal Court in Brisbane.
It alleges the agency six times between 2005 and 2009 attempted to induce Singapore Airlines, Malaysian Airlines and Emirates to agree to stop directly offering and booking their own international airfares at prices less than Flight Centre offered.
Flight Centre plans to fight the action, saying the ACCC seemed to consider the agency to be a competitor of the airlines whose products it sells, rather than an agent for those airlines.
Flight Centre managing director Graham Turner said the action related to legitimate discussions between the agency and some airlines to ensure it had access to all fares that were released to the market.
"For the past 30 years, FLT has built its reputation on making travel more affordable,'' Mr 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.
"Given that travel agents book up to 80 per cent of international flights in Australia, it also benefits consumers because it means special offers are not solely available from supplier websites.''
The ACCC initially requested information after Flight Centre ended airline contract discussions with Singapore Airlines in April 2009 and temporarily treated the airline as a non-preferred supplier.
Flight Centre's concerns at the time mostly related to Singapore Airline's proposed changes in commission rates and the airline's "failure to give customers access to certain fares at a competitive price''.
The agency continued to book Singapore Airlines fares for customers but did not promote it as a preferred supplier.
The two have since agreed a contract which gives customers access to all of Singapore Airline's airfares.
The ACCC also alleged that Flight Centre's prices included both the amount collected for the airfare itself (which was then paid to the airlines) plus the commission that Flight Centre retained for its booking and distribution services.
The statement said that the ACCC alleges that Flight Centre provided booking services to the public and distribution services to the international airlines in competition with the airlines' internal sales divisions.
"It is alleged that the purpose and likely effect of the arrangements sought by Flight Centre was to maintain the level of Flight Centre's commissions,'' it said.
It is seeking declarations, injunctions, pecuniary penalties and costs.
A directions hearing is listed for Friday April 13.
goo.gl/QQBHK
AUSTRALIA'S consumer watchdog is taking one of Australia's largest travel agencies to court, alleging it tried to induce three airlines into price fixing.
The Australian Competition and Consumer Commission released a statement this afternoon saying it had started proceedings against Flight Centre Limited in the Federal Court in Brisbane.
It alleges the agency six times between 2005 and 2009 attempted to induce Singapore Airlines, Malaysian Airlines and Emirates to agree to stop directly offering and booking their own international airfares at prices less than Flight Centre offered.
Flight Centre plans to fight the action, saying the ACCC seemed to consider the agency to be a competitor of the airlines whose products it sells, rather than an agent for those airlines.
Flight Centre managing director Graham Turner said the action related to legitimate discussions between the agency and some airlines to ensure it had access to all fares that were released to the market.
"For the past 30 years, FLT has built its reputation on making travel more affordable,'' Mr 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.
"Given that travel agents book up to 80 per cent of international flights in Australia, it also benefits consumers because it means special offers are not solely available from supplier websites.''
The ACCC initially requested information after Flight Centre ended airline contract discussions with Singapore Airlines in April 2009 and temporarily treated the airline as a non-preferred supplier.
Flight Centre's concerns at the time mostly related to Singapore Airline's proposed changes in commission rates and the airline's "failure to give customers access to certain fares at a competitive price''.
The agency continued to book Singapore Airlines fares for customers but did not promote it as a preferred supplier.
The two have since agreed a contract which gives customers access to all of Singapore Airline's airfares.
The ACCC also alleged that Flight Centre's prices included both the amount collected for the airfare itself (which was then paid to the airlines) plus the commission that Flight Centre retained for its booking and distribution services.
The statement said that the ACCC alleges that Flight Centre provided booking services to the public and distribution services to the international airlines in competition with the airlines' internal sales divisions.
"It is alleged that the purpose and likely effect of the arrangements sought by Flight Centre was to maintain the level of Flight Centre's commissions,'' it said.
It is seeking declarations, injunctions, pecuniary penalties and costs.
A directions hearing is listed for Friday April 13.
goo.gl/QQBHK
