Flight Centre smacked with $A11m fine for price fixing in Australia

Shane Doyle QC

Flight Centre has been smacked with an $A11 million fine in Australia for price fixing arrangements with three airlines between 2005 and 2009.

In addition to the fine, Federal Court Justice John Logan ordered Flight Centre not to make any price arrangements with international airlines for three years.

In December, the court upheld the Australian Competition and Consumer Commission’s claim that Flight Centre had induced Singapore Airlines, Malaysia Airlines and Emirates to stop offering international fares at lower prices than the travel agency.

The Australian commission had claimed Flight Centre had broken the law on six occasions between 2005 and 2009.

Judge Logan ordered Flight Centre to pay the fine in seven days but that was moved to 45 days after the company’s lawyer Shane Doyle QC, asked for an extension.

Flight Centre has appealed the December judgment and has signalled it will now appeal the penalty. Appeals are likely to be heard in the 2014/2015 fiscal year but the company will account for the penalties in the 2013/2014 year. Those results are due in August.

The ASX-listed company today updated its 2013/2014 fiscal year outlook to reflect the penalty.  The company continues to target a full year profit before tax of between $A370m and $A385m, a growth of 8% to 12%.

The company said in a statement the $A11 million penalty will be partially offset by an unrelated one-off gain.

A spokesman for the Commerce Commission here says the commission does not have a current investigation relating to the price fixing but it plans to review the Australian judgment.

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