Flight Centre gets $11m price fixing fine
Travel agency Flight Centre has been ordered to pay an $11 million fine for inducing three airlines – Singapore Airlines, Malaysia Airlines and Emirates – into price-fixing arrangements between 2005 and 2009 after court action by Australian Competition and Consumer Commission.
Justice John Logan ordered that the company must pay the fine within 45 days and said they should refrain from trying to make any price arrangement with any international airline for three years. In imposing the penalty Justice Logan in the Federal Court in Brisbane ruled that there was ”no doubt” that commercial profit was the driver of Flight Centre’s attempt to fix prices.
“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,” ACCC chairman Rod Sims said.
He said the penalty would have been higher if Flight Centre had successfully convinced the airlines to fix their prices. “Flight Centre was found to have made the attempt, the airlines didn’t agree so because it was an attempt it therefore gets a lower penalty than otherwise and so we think the penalty is a reasonable one,” he said.
Flight Centre intends to appeal the decision and penalty. Flight Centre boss Graham Turner said an appeal would clarify its position and rights as a travel agent. Mr Turner says it complies with the law and changed its business practices after the ACCC launched an investigation into the price fixing attempts in 2009.
Flight Centre will also pay part of the ACCC’s legal costs.
