Australian Competition Authority Accuses Flight Centre Of Attempted Price Fixing - Business Travel News

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Australian Competition Authority Accuses Flight Centre Of Attempted Price Fixing

March 12, 2012 - 10:15 AM ET

By David Jonas

The Australian Competition and Consumer Commission alleged that Flight Centre Limited attempted price-fixing arrangements with three airlines.

ACCC said the travel agency, parent of corporate travel management company FCm Solutions, on six occasions between 2005 and 2009 "attempted to induce international airlines Singapore Airlines, Malaysian Airlines and Emirates to agree to stop directly offering and booking their own international airfares (including over the Internet) at prices less than Flight Centre offered. 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."

Flight Centre said ACCC's case "related to legitimate discussions" between the agency and the airlines "to ensure Flight Centre had access to all fares that were released to the market." To provide travelers "cheaper airfares," Flight Centre has "slashed the commission that airlines required travel agents to charge and thereby reduced overall ticket prices," according to a company statement.

Flight Centre added that ACCC's interpretation of the agency competing against "the airlines whose products it sells ... is at odds with the International Air Transport Association's understanding and agreements." Flight Centre managing director Graham Turner added that the agency "is not in the business of making airfares more expensive and does not ask suppliers to raise prices or to withdraw fares." The company will "vigorously defend our position," according to Turner.

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