FC mark-ups questioned

FLIGHT Centre has defended its practices around airfare mark-ups after an ABC investigation alleging consultants are being encouraged to “gouge” customers.

The broadcaster will tonight air a report on its 7.30 program in which past Flight Centre staff claim mark-ups are added to customers’ fares on an ad-hoc basis, ranging from $30 up to hundreds or thousands of dollars.

The program will also report that staff are pressured to pursue mark-ups because of low pay rates, with base pay set $4,000 below minimum wage, before commissions.

It reports that up to 30% of staff have not met the minimum wage mark through commissions, requiring their pay to be “topped up” by Flight Centre.

Pay and conditions are currently under negotiation as part of a new Enterprise Bargaining Agreement (EBA), but the ABC says Flight Centre is also being investigated by the Fair Work Ombudsman.

In a statement to all staff today, Flight Centre says the ABC’s report is based on “various allegations that in most cases are untrue and are not widely held by our people”.

“In terms of pay and conditions, we strongly denied the allegations that the ABC put to us, particularly in relation to our people being paid below Award levels,” the statement says, adding that the issue also highlights a need to move to a simpler model “which we are doing with the EBA”.

It says margins are generally paid by suppliers rather than added as mark-ups, and that publicly available margin information “does not support claims that either excessive marking up is taking place or that it is happening more frequently”.