Flight Centre accused of price fixing

[Mal]

Flight Centre accused of price fixing | Latest Business & Australian Stock market News | The Courier-Mail

AUSTRALIA'S consumer watchdog is taking one of Australia's largest travel agencies to court, alleging it tried to induce three airlines into price fixing.

The Australian Competition and Consumer Commission released a statement this afternoon saying it had started proceedings against Flight Centre Limited in the Federal Court in Brisbane.

It alleges the agency six times between 2005 and 2009 attempted to induce Singapore Airlines, Malaysian Airlines and Emirates to agree to stop directly offering and booking their own international airfares at prices less than Flight Centre offered.

The bolding is mine. Nice form Flight Centre (assuming they are proven guilty).

 

[AVC]

I think Flight Centre were within their rights.

No different to any wholesaler trying to undercut their distributors.

Wholesaler need to do just that. Wholesale. Not sell stuff wholesale to other resellers then advertise it themselves cheaper.

If that sort of behaviour continued on, then no agencies would sell the Airline's product, as they could not compete, you would only be able to buy it direct from the Airline.

 

[Mal]

If that sort of behaviour continued on, then no agencies would sell the Airline's product, as they could not compete, you would only be able to buy it direct from the Airline.

The problem (as I see it) is that Flight Centre has such a dominant place in the Australian Travel Agent industry that they influence sales. So if they were to threaten to not sell Qantas tomorrow then it is a significant threat to Qantas. The ACCC takes a dim view towards this type of behaviour. Will be something interesting to watch...

 

[Sprucegoose]

The problem (as I see it) is that Flight Centre has such a dominant place in the Australian Travel Agent industry that they influence sales. So if they were to threaten to not sell Qantas tomorrow then it is a significant threat to Qantas. The ACCC takes a dim view towards this type of behaviour. Will be something interesting to watch...

Yes agree, the key word here is 'market dominance', with that comes certain obligations to not 'abuse' that position.

 

[oz_mark]

I think Flight Centre were within their rights.

No different to any wholesaler trying to undercut their distributors.

Wholesaler need to do just that. Wholesale. Not sell stuff wholesale to other resellers then advertise it themselves cheaper.

If that sort of behaviour continued on, then no agencies would sell the Airline's product, as they could not compete, you would only be able to buy it direct from the Airline.

Yes, but you can't tell someone not to sell it cheaper than you are selling it!

 

[anat0l]

Sounds like MO'L style tactics, except that in Europe MO'L mostly gets away with his actions.

I'm surprised Singapore et al. haven't effectively gotten sick of such inducements and simply resort to promoting their fares on their website alone, or even setting up their own agencies or selling through airline offices themselves at rates more favourable to them. It's had to come down to exercising a regulatory muscle (ironically spearheaded by the ACCC).

Kind of also reminds me too of how AA withdrew selling through Orbitz etc. (or forced the use of a new GDS - can't remember)....