Anyone know what standard markup is on tickets

[mayhemdiva]

The holiday from hell continues thanks to Flight centre..
Paid cash 8 june $5066 for two tickets, Mel-Ist, Lhr-Mel flying 11/12/2009, told I had to pay cash within 24 hours to get price. Done. Today malaysian airlines sent me my receipt for cash of 2048 (thats with all taxes..total) per person..
That was dated the 11 June 2009..
so is that normal a 35% markup on the base price ???
FORM OF PAYMENT: CASH
FARE: BASE 1274.00AUD
TAX/FEE/CHARGE 47.00AU/4.50WG/722.90XT
TOTAL 2048.40AUD

I know they get a commission, but 485 per person..they did nothing else
I gave them my flights!!!

 

[dajop]

I know they get a commission, but 485 per person..they did nothing else
I gave them my flights!!!

Lesson no 1 .... always shop around.

Although flight centre are not the only culprits ..... a friend recently told me about some special fares advertised in the window of Escape travel, $500 return MEL-SIN (on Emirates). I laughed, online agents were selling the same fare for around $420 (and EK itself for $400). Oh hang on Escape travel is Flight Centre ....

 

[winfred]

I would lodge a complaint with Flight Centre and ask them to review the pricing. I would also look at cancelling the flight and book with Malaysian Airlines direct if it is that much cheaper, as long as cancellation fees is not huge.

My experience with travel agents when I used to buy tickets from them is that they charge between 3% to 8% on the base fare.

 

[Dave Noble]

The agent can charge what they want to charge; if they charge too much then people are unlikely to use them. Given that you agreed to buy tickets for that cost from them , if they have a large mark up then c'est la vie

As suggested above, shop around when buying tickets from agents

Dave

 

[Travel Guru]

Although each agent at FC is free to set their own markup, you'll find that the standard markup on an economy ticket is $200.

If they've charged a $485 markup, one of two things has happened, either the agent has totally rorted you in which case you've learnt your lesson hopefully and will shop around, or the more likely which happens all the time is that their head office or ticket centre has found a cheaper fare to ticket on than what the agent quoted you.

I am a little confused why you'd receive a receipt from MH though?

At the end of the day, there's really nothing you can do about it, you agreed on a price, you paid it, use it as a learning experience.

TG

 

[ChrisBNE]

I am a little confused why you'd receive a receipt from MH though?

At the end of the day, there's really nothing you can do about it, you agreed on a price, you paid it, use it as a learning experience.

TG

Most likely sent a copy of the eticket which would have the published fare displayed.

Caveat Emtor - let the buyer beware.

 

[Travel Guru]

Most likely sent a copy of the eticket which would have the published fare displayed.

Caveat Emtor - let the buyer beware.

Well if that's the case and it's the gross fare then unless they have stated a service charge on the invoice then they've broken the law by selling over gross and you do have a reason to complain.

TG

 

[oz_mark]

Well if that's the case and it's the gross fare then unless they have stated a service charge on the invoice then they've broken the law by selling over gross and you do have a reason to complain.

Just a slightly o/t question, and more for my info, but which law are they breaking?

 

[Travel Guru]

You know it pains me to utter the following 3 words, but i dont know! :mrgreen:

It was always drummed into me from the moment I joined the industry (back when commissions were high enough that we didn't need service charges) that it was illegal to sell over the gross price on an airline ticket, no I don't know whether they're referring to a consumer law, or whether it was a directive and requirement of IATA, thats something that id need to look into, but I always took it as gospel that selling over gross was a big no-no.

Definately worth looking into for the OP as it would give them the option of going after FC for the huge mark up, especially when a 2k ticket to Europe on MH is likely to have a commission of around $120-150.

TG

 

[ChrisBNE]

You know it pains me to utter the following 3 words, but i dont know! :mrgreen:

It was always drummed into me from the moment I joined the industry (back when commissions were high enough that we didn't need service charges) that it was illegal to sell over the gross price on an airline ticket, no I don't know whether they're referring to a consumer law, or whether it was a directive and requirement of IATA, thats something that id need to look into, but I always took it as gospel that selling over gross was a big no-no.

Definately worth looking into for the OP as it would give them the option of going after FC for the huge mark up, especially when a 2k ticket to Europe on MH is likely to have a commission of around $120-150.

TG

I think it may be more an IATA regulation than a TPA law. I havent looked at TPA law for over 10 years mind you so not sure if it has changed but I don't think there is any provision for the law to restrict a retailer's level of revenue and profit margin.

 

[Lucky_man]

FC have been in trouble with ACCC before for the way they give the impression that their fairs are the lowest and you do not need to shop around. They changed their sales slogans a bit.

But you could write to ACCC saying that you did not shop around because they claim "Unbeatable" and "Fly Free" if beaten on price.

A lot of inexperienced and sadly some experienced travellers get roped in by this.

But bottom line is you got what you paid for - just that you could have done a lot better.

 

[Alanslegal]

Unfortunately it is an expensive lesson learnt for the OP and that one must really shop around. Businesses can mark up whatever $$ %% they choose - there are no laws against that - but there are laws in which they conduct their business (to ultimately protect the consumer).

The most basic protection is that fares, goods etc the amount must be all inclusive. Some sectors of the community have been getting away with this in recent times eg. the flight industry, motor industry but lately there has been a shift to comply with this So if the OP's travel agent gave him or her an all inclusive price upfront and the OP agreed to that amount, then in that respect I'd say all is above board.

 

[MEL_Traveller]

I believe travel guru is correct.

I don't know of the origin of the rule either, but from my experience when I used to work as a travel agent I too know it is not permitted to sell a fare above the published IATA level.

That was all fine and well back in the old days when airlines used to offer us commissions of up to 33% on the published fare levels - and this is where competition was generated between agents.

If, for example, an airline was offering 16% commission on first class fares to europe (this is an actual example), then we would be free to sell the fare anywhere from the published price down to the net (that is, -16% off the gross published fare level).

In most cases we would sell for the net plus 8%. Big bikkies in those days, but we were lower priced than many other agents selling for the standard net plus 10%. So we got the business. The ticket would always reflect the full published fare - so while the ticket would have stated $9000, you would only have paid us $8100 (for example).

Pretty much the same thing happens these days except margins are much much lower and so the variance between agents is very small. In many cases the 5% now offered is just enough to keep agents in business and pay wages + costs of the office.

What seems to be happening these days however is that some agents are charging a booking fee. This appears to fall outside the fare rules and can be freely added on top of the fare. Usually however this seems to be in the $15 - $50 range. (You'll see this offered by many internet booking agencies - especially on the LCC fares where they'll book for you but add their fee to make money.)

But the fee should be made clear to you.

What might have happened with the particular case with FC and Malaysian is that after you paid you $$ the agent found a cheaper booking class which might account for the difference in fare. If this occured then our agency would have refunded you the money in the old days. I would give FC a call and see what has happened and whether you can get that money back (the agent would only have been billed the lower fare).

 

[adampenrith]

I used to manage a FC store, before they charged a service fee.

To make profit on a sale you marked the International Airfare up by whatever the market could handle.

We would purchase the fare at a wholesale rate to FC from the airline. Some fares were special to FC - there used to be a fab Business Class fare on LH that was $1000 below anyone else's wholesale rate. So we would mark that up by the $1000 and then discount.

Standard markup was $200 on an International Fare - in those days we sold AN and QF at the published price and got between 9 and 11% on that fare.

So we would get what we could on hotels, cars, insurance (a big part of our income).

So yes shop around, but it can work both ways.

In Bali, I have heard and often tell new travellers to Bali - the best price is the price you are happy with, rather than the lowest price you can bargain.

There is part of the deal which means that the seller must make some money for providing the product and the service as well as you getting something for a good price.

If you were happy with the original price you paid - be happy about it.

Adam

 

[Mr Ed]

Thank God for the Internet.

 

[MEL_Traveller]

I used to manage a FC store, before they charged a service fee.

To make profit on a sale you marked the International Airfare up by whatever the market could handle.

We would purchase the fare at a wholesale rate to FC from the airline. Some fares were special to FC - there used to be a fab Business Class fare on LH that was $1000 below anyone else's wholesale rate. So we would mark that up by the $1000 and then discount.

Standard markup was $200 on an International Fare - in those days we sold AN and QF at the published price and got between 9 and 11% on that fare.


Adam

But I'm assuming that no matter how much the mark-up was always from the net and the fare sold was never above the published IATA level?