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FC VS THE ABC: What does it mean for agents and the travel industry?

The ABC aired their investigative Flight Centre Limited segment on the 7.30 Report on Wednesday, following a damning online story by the broadcaster on their news site.

The ABC aired their investigative Flight Centre Limited segment on the 7.30 Report on Wednesday, following a damning online story by the broadcaster on their news site.

The ABC Investigation centred on speaking 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 what was a very one-sided story that featured only two ex-novice consultants in the segment, the ABC also cited a variety of other allegations including underpaying staff and enforced boozy ‘buzz nights’ with stories of former agents saying that working at the company was like “being in a cult”.

You can read the full story here as well as Flight Centre Travel Group CEO, Skroo Turner’s response to the staff here.

While the feedback since the story broke from the 10,000 Flight Centre staff in Australia alone has mainly been supportive of the company, suggesting that this is indeed a minority of cheesed off ex-staff, the brand has still copped PR and consumer heat with plenty of negative comments from ex-Flight Centre employees (Read on for some of those for and against comments here) fuelling the fire.

The story has boringly rolled on since the segment was aired with the ABC shovelling yet deeper and claiming they have now received 200 more complaints from (unnamed sources) current and ex FCTG staff around bullying, a pressure to consume alcohol and instances of drug use within stores.

So the bigger question for the industry has to be, is this a fair story? And what does it mean for the perception of travel agents at Flight Centre and in general?

Let’s break down the ABC’s claims.

 

1. On ‘ripping off customers’

Let’s get real here. Like any business in any sector, all products have a base cost and are marked up appropriately to meet specific market and customer demographic needs.

Given many agents in the industry do not charge fees for their time and expertise (including FC), their service fee is reflected in their markup on products (hello livelihood, err hello business in general).

Why do you pay more for a banana in Coles in the wealthy Eastern Suburbs of Sydney than say in the lesser wealthy area of Campbeltown? That’s just plain economics.

While there may have been some rogue agents who have been price gouging under the radar, in an online world of highly informed customers, consistently price hiking would certainly mean no more customers as they would plainly not be price competitive. Not a good long-term business plan for any travel agent.

You could argue that banks, telcos and many other products and services have in many cases, been ripping us off for years. But as consumers, we always still have a choice to use them or not.

But still agents, regardless of your business model, get ready for some curly questions from customers now wanting to know precisely “how much you’re marking up their holiday?”

 

2. On ‘paying minimum wage’

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Flight Centre has admitted that a base salary (before commission) for novice starters of $33,500 is below the minimum $38,000 and will be increased to between $41,000 and $44,000 which is a good thing for everyone.

Flight Centre says that; “Our people are guaranteed to earn at least the applicable minimum award wage. Most do so comfortably based on their fixed pay and commissions, and there is no limit on the upside (incentives are uncapped for our salespeople).”

So while there are some valid points around minimum wage on paying a base salary vs commission still being confusing, the ABC’s allegations could easily apply to retail in general as a sector that has historically paid low wages.

It’s important to remember that when anyone joins a company, they have to sign a contract which clearly outlines the pay and incentive structure. If they are not comfortable with it, they frankly shouldn’t join or flag it legally if their complaints go unheard by their employer.

 

3. On ‘being cult-like’

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What is a cult anyway? According to Wikipedia, ‘The term cult usually refers to a social group defined by its religious, spiritual, or philosophical beliefs, or its common interest in a particular personality, object or goal.’ By this definition, it would suggest that all companies are cults, including the ABC.

Having worked at Flight Centre myself for five years, many years ago, I can say that my experience was like that of many others in being one of ‘working and playing hard’.

Yes, I often put in long hours (I wanted to get my incentive and because I cared about my job and advancing my career), and for sure, I made lots of Flightie friends, many of which I’m still good friends with all these years later.

And yes, I travelled a bit for work for no extra-base pay (Woohoo! To some fantastic places by the way on Flight Centre’s tab).

I loved buzz nights, the partying, conferences and Global Gathering as well as everything I learnt along the way that helped me be better at what I did and enhance my career prospects through gaining invaluable experience.

The Flight Centre Foundation

I also enjoyed the numerous personal benefits including travelling for less, the free gym and healthwise perks, leadership (all of my bosses were female), training, conferences, mentoring, fams and of course the promotions I got and my financial incentive opportunities.

But most of all, I loved the cult-ure, the sense of belonging and comradery that made going to work enjoyable.

Was it a cult? By definition, probably. But who cares?

I can say that since I left Flight Centre (Around 15 years ago), I have only experienced variations on the same theme at every other travel company I have worked for or with (and I’ve worked with most in Australia in some shape or form). And I’ve loved it.

The reason I’m so passionate about the travel industry is that as the biggest industry in the world, I believe in the incredible opportunities it presents for those who choose to see them. But just like finance, pharmaceuticals, government (?!) or any other industry – it’s not for everyone.

So it is of paramount importance to say that if an individual has a legal claim to make against FCTG or any other company for any reason, then they should seek legal advice immediately and take the appropriate steps to honour their allegations.

Sending an email to the ABC is not going to achieve anything for the individual in question, and at best becomes anonymous hearsay that only adds to the negative media fodder and lack of story credibility.

 

4. On being a ‘Boozy culture’

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Flight Centre does have a ‘boozy’ culture.

Welcome to the travel industry. Welcome to Australia.

As a country whose national Cricket team is sponsored by a beer company, for example, is it hardly surprising that alcohol is accepted as part of our everyday norm?

And as an industry, travel isn’t any different from any other sector when it comes to social alcohol consumption. The only difference is that because travel is entertainment and leisure related, perhaps you could say that we have more opportunities to ‘socialise’ together, in more places, with a drink in our hands?

Alcohol in Australia comes with its own set of universally complex social problems that makes it unfair to label Flight Centre alone as having a ‘boozy culture’. From drink driving to domestic violence and health issues alone, Australia has a big problem with alcohol in general.

Thankfully not everyone drinks though and so surely it’s all a matter of choice isn’t it? If no-one is physically forcing and making you drink alcohol at work, can anyone legitimately claim they were ‘pressured’ into drinking?

Any form of harassment, bullying or any other behaviour that surrounds this is, of course, a serious matter and should be raised via legal advice as mentioned above. No excuses.

Alex Lee (R), The Checkout. Source: YouTube

The Checkout. Source: YouTube

I want to finish this piece by saying that while you may think I’ve been drinking Flight Centre kool-aid or am being paid for this story by Flight Centre (I’m not by the way), the truth is that honestly, the bigger story here for me is that I believe in the travel industry as an incredible career for life.

These kinds of half-baked stories reflect poorly on the entire industry and the majority of wonderful people who work in it (especially at FC right now), and much like the ABC’s last unwarranted attack on travel agents (Read that here in case you missed it) only serve to undermine all of the good that the vast majority of travel agents and businesses strive to achieve for their people and their customers.

As part of researching this story, we did ask AFTA (Australian Federation of Travel Agents) for their opinion but they declined to comment.

What’s your take on the whole story? Share your thoughts below.