News National Flight Centre accused of ‘ripping off’ customers

Flight Centre accused of ‘ripping off’ customers

Flight Centre
Flight Centre has posted a net loss for the 2020/21 financial year due to the pandemic. Photo: ABC
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Australian travel giant Flight Centre has been accused of ripping off customers and underpaying staff, some of whom say working at the company was like being in a cult.

ABC Investigations has spoken to dozens of current and former staff who said Flight Centre encourages its travel consultants to gouge customers by adding hundreds, sometimes thousands, of dollars to bookings.

“In training they are telling you that you can mark-up flights,” said Olivia Little, who worked as a travel consultant at a Flight Centre store on the New South Wales central coast in 2016.

“It’s not a secret thing.”

The practice is not illegal and Flight Centre denies it is widespread among its more than 10,000 Australian staff.

But it’s not just Flight Centre’s dealings with its customers that has come under scrutiny.

Past and present staff have told the ABC the $6.7 billion company is built on a “work hard, play hard” alcohol-fuelled culture that grinds staff down with miserable pay and excessive unpaid overtime hours.

The Fair Work Ombudsman is now undertaking an investigation into how Flight Centre pays its staff, prompting the company to scramble to fix its pay deal amid a growing staff revolt.

The mark-ups

The process staff have described for marking up bookings is remarkably uncomplicated and ad-hoc.

Staff detail a practice as simple as reserving a flight, then manually adding an extra amount to the booking in Flight Centre’s online system — ranging from as little as $30 to hundreds or even thousands of dollars — before revealing the total price to the customer.

Ms Little marked-up flights during her 13 months working at Flight Centre and observed other team members doing the same on countless occasions.

Flight Centre
Olivia Little said she observed countless mark-ups of flights during her time working at Flight Centre. Photo: ABC

“Say the flight was $1500 — they would mark-up and say ‘oh the flight is $1800’. Or if it’s a huge business class flight they would mark up a couple of thousand.”

A current staff member, who worked at Flight Centre in Melbourne for over two years and requested not to be named, said for some workers, the practice was about seeing how much they could add-on and still get away with.

“You kind of pick and choose who you do it to,” the woman told the ABC.

“You aim for a 10 per cent margin [on top of the cost of the flight]. I know consultants who aim for a 20 per cent margin.”

Renee Olofsson, who worked at a NSW Flight Centre store, said customers are not made aware that the total cost of a booking is adjusted during the process of marking-up.

“The thing that sat, I guess, uneasy with me was that you weren’t transparent with that actual cost,” Ms Olofsson said.

“It was as much money as you could get out of your customer that they would hand over. Sky’s the limit on your mark up.”

Far from a clandestine practice conducted by a few rogue travel consultants the importance of adding extra fees to flights is drilled into staff from day one, according to Ms Olofsson.

“It definitely wasn’t hinted at. It was, ‘this is how we operate. This is how you make money. This is part of your job’,” said Ms Olofsson, who worked at one of the company’s 689 Australian stores.

It wasn’t uncommon actually that I would have a manager physically adjust the mark-up using my logins and on my customers.”

Even though the scale of the mark-ups can vary booking to booking, the extra cost to the customer is justified internally as representing payment for the service provided.

In a statement to the ABC, Flight Centre said like other retailers, it earns a margin on the products it sells, but said it does not engage in “excessive marking-up”.

“A central team in Australia proactively monitors margins on individual transactions and action is taken if the margin earned is considered excessive. Action can and has included dismissal,” a Flight Centre spokesperson told the ABC.

“The company strongly believes in a fair margin and refers to this in its philosophies.”

But one current Flight Centre staff member, who requested not to be named, said she feels like the process rips-off customers and there was a sense of guilt that came with marking-up.

“You don’t do it all the time because you feel guilty. You’re not human if you don’t feel guilty for absolutely ripping-off customers.”