Flight Centre mulls appeal after regulator wins price-fixing case
Shares of the Queensland-based company fell almost 8 per cent after the decision was handed down in the Federal Court in Brisbane on Friday morning, but recovered to close down 3 per cent at $46.
Mr Turner said the company was surprised by the decision and was obtaining legal advice on whether to launch an appeal.
"[The] ruling is likely to have implications for the travel industry and for many retailers and agents in other sectors," Mr Turner said.
"As we have maintained throughout this 4½-year saga, the company is not in the business of making air fares more expensive."
The ACCC said Flight Centre had been involved in anti-competitive behaviour and breached the Trade Practices Act.
It claimed that on six occasions between August 2005 and May 2009 Flight Centre attempted to induce specific airlines to collude on the price of international air fares - to make sure the airlines did not offer lower fares than the travel agent's website.
Justice John Logan agreed, saying Flight Centre had attempted to convince Singapore Airlines, Emirates and Malaysian Airlines to make sure they were not offering lower airfares on particular routes than it was offering to customers.
"In summary, what is revealed is not an attempt to induce the making of a contract, arrangement or understanding with respect to the supply of international travel but rather one directed to end removing the air fare differentiation so as to eliminate or reduce competition by a substitute, an airline, for the retail or distribution margin for distribution or booking services," he found.
"In this way, Flight Centre sought at least to maintain or control that margin and that was the likely effect of its attempts."
Financial penalties will be decided at a court hearing on December 19.
Frequently Asked Questions about this Article…
The Australian Competition and Consumer Commission (ACCC) won the price-fixing case against Flight Centre, with the Federal Court ruling that the company engaged in anti-competitive behavior.
Following the court's decision, Flight Centre's shares initially fell by almost 8% but later recovered to close down 3% at $46.
Flight Centre's managing director, Graham Turner, expressed surprise at the decision and mentioned that the company is considering an appeal and seeking legal advice.
The ruling is likely to have significant implications for the travel industry and other sectors, as it highlights the importance of compliance with competition laws.
Flight Centre was accused of attempting to induce airlines like Singapore Airlines, Emirates, and Malaysian Airlines to not offer lower airfares than those available on Flight Centre's website.
The alleged price-fixing activities took place on six occasions between August 2005 and May 2009.
Financial penalties for Flight Centre will be decided at a court hearing scheduled for December 19.
The case underscores the importance of regulatory compliance and the potential financial and reputational risks companies face when involved in anti-competitive practices, which are crucial considerations for investors.
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