Flight Centre accused of gouging customers with mark-up practice

STAFF at Flight Centre claim they are told to mark-up individual bookings by up to thousands — and customers have no idea.

FLIGHT Centre staff say they are encouraged to add extra costs, adding up to thousands of dollars on individual bookings as part of a workplace practice they’re told is “part of their job”.

In an ABC investigation airing on 7.30 tonight, dozens of current and former employees of the travel agent giant said they were pressured by management to gouge customers by adding extra costs on bookings, which ranged from as little as $30 to thousands of dollars.

Staff members said under the practice, which was drilled in during training, they would make a reservation for a flight and then manually add an extra amount to the booking before showing the final price to the customer.

Customers were not made aware the price of their flight had been marked up.

“Say the flight was $1500 — they would mark-up and say ‘Oh, the flight is $1800’,” Olivia Little, who worked as a travel consultant at a New South Wales Flight Centre store in 2016, told the ABC.

“Or if it’s a huge business class flight they would mark up a couple of thousand.”

A current Melbourne-based staff member said travel consultants would see how much they could get away with adding on to the final price.

“You kind of pick and choose who you do it to,” the staffer told the ABC.

“You aim for a 10 per cent margin (on top of the cost of the flight). I know consultants who aim for a 20 per cent margin.”

Flight Centre employs more than 10,000 staff and has 689 stores Australia-wide.

In a statement to news.com.au, Flight Centre denied mark-ups were “excessive” or frequent.

Staff members said they were told in training they could mark-up flights.

“It definitely wasn’t hinted at. It was, ‘This is how we operate. This is how you make money. This is part of your job’,” said Renee Olofsson, who worked for Flight Centre in NSW.

“It wasn’t uncommon actually that I would have a manager physically adjust the mark-up using my logins and on my customers.”

While the practice wasn’t illegal, staff told the ABC they felt “guilty” for gouging customers.

“You don’t do it all the time because you feel guilty,” a current employee said.

“You’re not human if you don’t feel guilty for absolutely ripping off customers.”

In a statement to news.com.au, Flight Centre said: “Margins are generally paid to the company by the supplier.”

“Our margin information is publicly available and it does not support claims that either excessive marking up is taking place or that it is happening more frequently,” a Flight Centre spokesman said.

“As outlined in our philosophies, we strongly believe in a fair margin and we monitor this proactively.

“Competitive forces obviously dictate prices — there is complete visibility over pricing — and there are additional safeguards for our customers to use in the form of price beat positions and price drop protection.”

Staff members said the mark-up practice was necessary due to the company’s method of paying employees.

According to the ABC, the current base wage for Flight Centre travel consultants was $33,500 — almost $4000 below Australia’s minimum wage. The rest of their salary came from commissions from the sale of airfares, hotels, travel insurance and holiday packages.

“Towards the end of the month, if you’re struggling to hit your target, you kind of have to pull the strings,” a current staff member told the ABC.

“You have to do what you have to do to get you there.”

If staff didn’t make enough on commission over a month, their pay was topped up to bring it in line with the minimum industry award wage.

Flight Centre told news.com.au it “strongly denied the allegations that the ABC put to us, particularly in relation to our people being paid below Award levels”.

“It’s disappointing that these allegations have been aired publicly but it has also highlighted the need to move to simpler and easier to understand pay model, which is what we are doing currently via an Enterprise Bargaining Agreement,” the spokesman said.

“The EBA is reliant on us ensuring that our people are better off overall and we have already made this commitment to them.”

The company also denied allegations in the ABC report of an “insane” party culture at Flight Centre, which staff said was like “a cult”.

“We believe we have a very strong and positive culture, which is generally celebrated and has in fact led to us (to) winning a number of awards. Many of these awards are based on our people’s feedback,” the Flight Centre spokesman said.