Where airlines made published fares available to agents through an electronic reservation system – the Global Distribution System (GDS). Flight Centre collected fares it sold, remit the nett amount to the airline and retain the balance of the fare as commission. It was free to set the price at which it sold tickets to the consumer. Flight Centre could also derive additional (‘back-end’ commission) through ‘preferred airline agreements’ (typically incentive-based), which it entered into with each of the three relevant airlines – Singapore Airlines, Malaysia Airlines and Emirates.
Not all seats were made available for sale by airlines, with some held back for promotions, and airlines could (and did) offer flights for sale directly at a price less than that published for agents on the GDS.
The ACCC alleged Flight Centre attempted to induce the three aforementioned airlines to enter into a contract, arrangement or understanding to fix, control or maintain prices for air travel and that this contravened s 45 with the aid of s 45A (which, at the time, deemed certain price fixing conduct between competitors to substantially lessen competition for purposes of s 45).
Michael Hodge (led by K Wilson SC) appeared for the Applicant, instructed by the Australian Government Solicitor.