Flight Centre in Australia has been ordered to pay an A$11 million fine for inducing three airlines into price-fixing arrangements.
This follows a Federal Court upholding a case from the Australian Competition and Consumer Commission’s case that Flight Centre had induced Singapore Airlines, Malaysia Airlines and Emirates to stop directly offering international air fares at prices lower than that offered by the travel agency.
The ACCC had claimed Flight Centre had broken the law on six occasions between 2005 and 2009.
The company was found to have breached the Trade Practices Act on five occasions.
Imposing the A$11 million fine, Justice John Logan also ordered Flight Centre to refrain from trying to make any price arrangement with any international airline for three years, The Australian newspaper reported.
He concluded that in August 2005, Flight Centre had threatened to withdraw from selling SIA flights unless the carrier agreed to pay a distribution margin, which he said was designed to have a “substantial lessening of competition’’.
Flight Centre has said it will appeal the judgment and may also appeal the penalties.
“Last year’s test case outcome was disappointing, but has not created a need for fundamental changes within our business, as any such changes that would have been required as a result of the judgment were made several years ago,’’ managing director Graham Turner said.
“While we are comfortable that we comply with the law, we consider it appropriate to test the decision at an appeal.
“This will clarify our position and rights as an agent.’’
Any appeals are likely to be heard in the 2014/15 financial year, Flight Centre said.
The company said that the A$11 million fine, which would be included in its accounts for the current financial year, would be partially offset by an unrelated one-off gain in its accounts.
It still expects its underlying pre-tax profit for the financial year to be between A$370 million and A$385 million, up at least 8% from the previous year.