Flight Centre will go to court today to defend allegations of price-fixing in a case that will see the travel giant face massive fines and injunctions if they lose.
Set to face the Brisbane Federal Court over the next three weeks, the travel company vigorously denies allegations by the Australian Competition and Consumer Commission (ACCC) that they schemed with Singapore Airlines, Malaysian Airlines and Emirates to set ticket prices and keep commissions high.
Flight Centre chief executive Graham Turner has criticised the claims, calling them "stupid" and insists Flight Centre did not seek to have suppliers raise prices or withdraw fares, news.com.au reported.
The International Air Transport Association (IATA) sought permission from the court last week to intervene in the case that is seen as the first significant test of new price-fixing laws that came into effect in 2010.
Under the law, companies found to have engaged in the practice can be fined up to $10 million, three times the benefit of their illegal conduct or ten percent of their total revenues per offence.
The uncertainty in the travel sector and the flow-on implications for those in other sectors is a concern if the ACCC prevails, according to analysts.
This is not the first battle for Flight Centre against the ACCC after they were forced to scrap its ‘Lowest Airfares Guaranteed’ slogan and take out advertising to inform the public back in 2005.
Source = e-Travel Blackboard: K.W.