FlightCentre hit with $10 million penalty in price fixing case
Australia-based travel agency FlightCentre is to pay $10.2 million for entering into “anti-competitive arrangements” with three airlines.
The Australian Competition and Consumer Commission (ACCC) says on six occasions between 2005 and 2009, FlightCentre attempted to enter into agreement with Malaysian Airlines, Singapore Airlines and Emirates Airlines, to prevent them from undercutting it on air fares.
ACCC alleged such arrangements would have lessened competition in the market. However, ACCC didn’t make any allegation against the trio of airlines.
Chairman of the regulator, Rod Sims, says:
“The ACCC took this action because it was concerned about the potential effect of Flight Centre’s conduct on competition and its ultimate impact upon the prices available to consumers.”
A FlightCentre official told Tnooz:
“We can appeal the penalty and may do so.”
FlightCentre has announced that it will still disclose the penalty in its 2013/14 accounts as an appeal is likely to be heard only during the 2014/15 financial year.
By taking the penalty amount into consideration, FlightCentre reported that it will continue to target a full year profit before tax (PBT) between $340 million and $355 million, an increase of 8-12% on PBT achieved during 2012/13.
FlightCentre will also pay part of the ACCC’s legal expenses.
In December 2013, in an effort to eliminate fake online reviews, ACCC released a set of guidelines for any Australian business (and also for review platforms) that has reviews in their website.
NB: Mallet image via Shutterstock.
Karthick was general manager for Tnooz in Asia until September 2014.