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Can Cheap Flights Really Be Guaranteed?

Australia’s largest discount travel agency, Flight Centre, has been accused of fixing their prices illegally.  The Australian Competition and Consumer Commission (ACCC) makes the accusation, stating that Flight Centre has been secretly working with Emirates, Malaysia Airlines, and Singapore Airlines in order to advertise deceptive pricing and undercut the competition.  A lawsuit has been filed with the federal court and it alleges that Flight Centre has, on six separate occasions between 2004 and 2009, asked the airlines in question to remove their discounted seats offered over the internet as the prices of these seats were lower than those of Flight Centre.

Flight Centre has not agreed to settle out of court and the issue may take a number of years to go through the courts to see if they have done anything wrong, but the issue does bring into question the practices of discount air travel agencies and their relationship with the airlines.  Do consumers really get the guaranteed lowest prices?  The travel agents are generally perceived as the good guys by consumers, working tirelessly to bring them the very best deals, but what exactly goes on between the principals, such as the airlines and hotels, and the travel agents?

The most effective way to distribute airline tickets has been discussed and debated ever since international tourism took off after the war.  In the ACCC lawsuit, the main issue to be addressed is whether airlines should sell their tickets directly or sell them through an agent.  One or the other should be the norm.  Travel agents do add additional value to customers by offering them package deals and one place to make all their travel plans, but whether they offer the lowest prices as they claim they do is in question.  Regardless, Flight Centre has done a booming business, with $249 million in profits in 2011.

See the original Google News article for more details.

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