Shares of Flight Centre Travel Group Ltd [ASX:FLT] have taken a huge hit, following allegations of ripping off customers, underpaying staff and a toxic work environment.
The travel agent has lost 15.47% of its share value since the beginning of the week — currently trading at $58.63.
Why has Flight Centre’s share price plummeted?
The fallen share price comes after ABC publicised an investigation earlier this week, into claims made by current and former employees of Flight Centre.
As reported by ABC, the claims highlighted staff member’s low pay and the push to secretly mark-up bookings, particularly targeting older and wealthier customers, to increase their own and the company’s commission.
Flight Centre commented on the issue, stating:
‘We are a retailer and we do earn a margin on the products we sell. Our overall margins are available publicly, but are not generally disclosed on a transaction-by-transaction basis’.
With unethical practices like this, it’s no surprise that investors are losing confidence in the retailer.
What is Flight Centre saying?
In a statement to the Australian Financial Review (AFR), Flight Centre Managing Director, Graham Turner stated that while service fees could be added to bookings to reflect extra work done by consultants, the company has procedures in place to monitor excessive charging.
He went on to say sources the ABC used for its investigation were ex-employees who ‘haven’t worked for us in years’ or had ‘failed in their jobs’, therefore not giving an accurate representation.
Let’s just say, Flight Centre has some serious damage control to run in order to salvage the company’s reputation and regain investors’ confidence.
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