$11m fine for Flight Centre is a win for travellers, Choice says

AN $11 million fine handed to Flight Centre for encouraging price-fixing has been hailed as a win for a travelling public.

The Federal Court has ordered Flight Centre to pay an $11 million fine.

A multi-million dollar fine handed to Flight Centre for encouraging airlines to engage in price-fixing is an important win for a travelling public too often caught out by hidden fees and scams, consumer advocates say.

The Federal Court yesterday slapped the travel agent with an $11 million fine after ruling in December it had attempted to get Singapore Airlines, Malaysia Airlines and Emirates to stop directly offering consumers international airfares at prices lower than Flight Centre.

The Australian Competition and Consumer Commission (ACCC), which brought the case, claimed Flight Centre had broken the law on six occasions between 2005 and 2009.

Tom Godfrey, the head of media at consumer group Choice, said the penalty sent a clear message to consumers.

“Flight Centre is sending a pretty clear message to consumers they don’t want to give them the best deals in the market,” he said.

“Basically, I think the fine sends a very clear message that the ACCC means business.

“Consumers should take comfort in the fact there are significant penalties when it comes to these types of rorts,” Mr Godfrey said.

In one instance, the Federal Court found that in August 2005 Flight Centre had threatened to withdraw from selling Singapore Airlines flights unless the carrier agreed to pay a distribution margin, which was designed to lead to a “substantial lessening of competition”.

While hoping it was an isolated case, Mr Godfrey said it was one of a number of scams that could catch Australian travellers unaware.

“The biggest rort is credit card surcharges charged by airlines,” he said.

“We just have to hope they’re not flouting other rules too.”

ACCC chairman Rod Sims welcomed the Federal Court’s findings.

“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,” he said.

“The Court’s finding that Flight Centre’s conduct attempted to eliminate difference in the international airfares offered to consumers demonstrates the ACCC’s concern was well-founded.”

In a statement, Flight Centre said it would consider appealing the fine.