Flight Centre has described an ABC probe into its inner workings and ethos as “based on various allegations that in most cases are untrue and are not widely held by our people”.
ABC Investigations, launched recently as “Australia’s most formidable daily investigative journalism unit” has compiled a lengthy story on Flight Centre, backed by a 7.30 Report segment aired last night.
It made allegations of underpaying agents and excessive marking up of prices and said some former employees found that working at the company was like being in a cult.
One consultant, said to still work at Flight Centre, was quoted as saying the markups were applied at the discretion of consultants.
“You kind of pick and choose who you do it to,” the staffer told the ABC.
“You aim for a 10% margin (on top of the cost of the flight). I know consultants who aim for a 20% margin.”
The story, published on the ABC site, is certainly controversial, though marking up is not illegal and Flight Centre denies the practice is widespread. It said staff could be dismissed for applying excessive margins.
A reference to “booze-soaked ‘buzz nights’” resembling initiation ceremonies in the ABC story drew a firm denial from Flight Centre.
“We are not aware of the allegation [the ABC] have made in relation to initiation ceremonies and have not received any complaints of this nature. This would be completely unacceptable and immediate action would be taken.”
Some of the ABC report appears to derive from New Zealand, where leading online news website Stuff.co.nz slammed Flight Centre last month for what it called “a booze-soaked culture and murals that suggest women should carry condoms and become ‘Naughtywise’ ambassadors at the company’s leading global event”. See: ‘Work-hard, party-hard’ Flight Centre cops a serve in NZ
On mark-ups, Flight Centre told the ABC a central team in Australia proactively monitors margins on individual transactions. “The company strongly believes in a fair margin and refers to this in its philosophies.”
Flight Centre chief Graham ‘Skroo’ Turner at the group’s Brisbane HQ
In an email sent to Flight Centre staff, Flight Centre Group chief executive Graham “Skroo” Turner said the ABC story was “based on various allegations that in most cases are untrue and are not widely held by our people.
“We believe we have a very strong and positive culture, which is generally celebrated and has in fact led to us winning a number of awards. Many of these awards are based on your feedback.
“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.
“It’s disappointing that these allegations, which in some cases appear to have been provided anonymously by our people, have been aired publicly but it has also highlighted the need to move to simpler and easier to understand the model, which we are doing with the EBA.
“The EBA [Enterprise Bargaining Agreement] is reliant on us ensuring that our people are better off overall and we have already made this commitment to you.
“As you will know, margins are generally paid to the company by the supplier. Our margin information is publicly available and it does not support claims that either excessive marking up is taking place or that it is happening more frequently.
“As outlined in our philosophies, we strongly believe in a fair margin and we monitor this proactively.
“Competitive forces obviously dictate prices and there are additional safeguards for our customers to use in the form of price beat positions and price drop protection.”
Turner said: “I believe that our people overall are proud of our company, its culture and its values.” Flight Centre has asked for feedback from staff.
Written by Peter Needham
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Nothing new here and surprised its taken them so long to find this out. FC is only cheap if you walk in with that magical written quote from another agent. Without that, and with staff earning mostly from commission, its obviously to each consultants benefit to mark up prices as high as possible.
I call this the Harvey Normal Sales Technique. Spend a fortune convincing people you are cheap, even though you’re not, by continually pointing out that you’ll beat anyone else’s quote. It’s worked for Harvey Norma, for Bunnings, for Flight centres and many others. It works because most people assume if they can beat other peoples prices then they must be the cheapest, whilst in most of these cases the reverse is the truth.
Nothing new here and surprised its taken them so long to find this out. FC is only cheap if you walk in with that magical written quote from another agent. Without that, and with staff earning mostly from commission, its obviously to each consultants benefit to mark up prices as high as possible.
I call this the Harvey Normal Sales Technique. Spend a fortune convincing people you are cheap, even though you’re not, by continually pointing out that you’ll beat anyone else’s quote. It’s worked for Harvey Norma, for Bunnings, for Flight centres and many others. It works because most people assume if they can beat other peoples prices then they must be the cheapest, whilst in most of these cases the reverse is the truth.