“Best Price Guaranteed” – by eliminating cheaper fares!

Have you ever looked at booking travel and wondered why all the local prices seemed the same? You may have tried the airlines online, gone down to your local agent or even tried one of the bigger agents, only to discover there is no difference? Well for many of our members this is no surprise. In the past month one of our biggest travel agencies, Flight Centre, has been fined $11M for price fixing. While this is being appealed, the genesis of this dispute in 2009 did not go unnoticed by our members.

I have just received an email from Singapore airlines …. text below is copied from the email. Does anyone know what has happened? “As a valued KrisFlyer member, I am writing to inform you that as a result of a commercial impasse with Flight Centre, Singapore Airlines airfares might not be available for purchase through Flight Centre retail outlets”.

It seems that the agency in question had come to a disagreement with the airline over who could sell what, and at what price. Eventually this got resolved and in 2010, things returned to normal. Given the amount of tickets sold by Flight Centre on behalf of Singapore Airlines, this amicable outcome was to be somewhat expected.

This paragraph from that news article shows the level of influence that keeping FC onside would have on SQ revenues. In a good year FC could sell about $100 million worth of SIA tickets. SIA said FC would contribute about 18-20 per cent of air tickets sold a year.

What was not expected was the subsequent interest shown by the ACCC into the disagreement and the principles behind it. It was that investigation that led to the conviction and fine that is now under appeal. News of this got our members thinking about the fine: was it enough, and was it aimed at the right people?

All of the people at FCL who were involved in approaching companies and determining that this strategy was appropriate should also be convicted and heavily fined. Then their names would be on the public record and if any other company ever hired them we would know that it is probable that their new company would also engage in dishonest behaviour.

With travel being more popular than ever before, competition has never been more intense. While we now have a travel industry ombudsman, their powers to enforce findings is very limited. At the same time, from July 1 2014, Travel Agents will not need to be a member of the Travel Compensation Fund; taking away that safety net from consumers should things go wrong.

So what is the future of booking travel, do you still use agents or has the world moved on now to the point where most travel is booked directly with the provider. Have you been a victim of price fixing and how do you think you should be compensated? Join the conversation HERE.


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