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NAB dumps Flight Centre corporate over booking 'abnormalities'

National Australia Bank has dumped Flight Centre's corporate bookings division as its travel provider after discovering the company had been overcharging it to process bookings.

NAB tore up a contract worth about $30 million a year in gross bookings in late 2017 after finding what it believed were abnormalities in its billings from corporate bookings business, FCM Travel Solutions, according to several well-placed sources.

It is understood that fees NAB incurred were in excess of what it felt was agreed under the contract between the big four bank and FCM.

The discovery prompted fury within the bank, which is understood to have pored over several years of bookings made through FCM to assess how much it was overcharged and look for any other discrepancies.

It is not known if the bank has considered legal action nor the total amount of the alleged overcharging.

NAB has now moved the bulk of its travel business to Amex Corporate Travel, but still has some of its bookings going through FCM.


Flight Centre co-founder and chief executive Graham Turner said the company corporate bookings division had a "commercial disagreement with NAB that was quickly and fully resolved last year", and still had "a good relationship with the bank commercially in travel and in banking".

"We understand NAB made a commercial decision to switch some of its ​travel business," Mr Turner said. 

"Clients do move from time to time and for any number of reasons."

A spokesman for NAB said the bank "does not comment on the details of our individual supplier contracts or on our relationships with our suppliers".

FCM's reputation has been damaged by the fallout of what one source described as the travel industry's "worst-kept secret".

Fairfax Media is aware of one ASX top-50 company deciding not to shortlist FCM for a recent tender after it learned about the NAB blow-up.

It comes at a time when parent company Flight Centre's finances are booming, partly off the back of stellar growth in its corporate travel arm.

The company's shares have almost doubled over the past year, growing from $28.22 to Wednesday's closing price of $55.13.

The stock is up 25 per cent over the past two years, while the ASx200 rose 14.9 per cent over the same period.

The value of Flight Centre's corporate bookings globally grew 19 per cent to just under $3.8 billion in the six months to December, representing almost 40 per cent of it business.

Flight Centre claims to now be one of the top-five corporate travel agents in the world. Its half-year pre-tax profit was up 28 per cent to $139 million, it revealed last month. Net profit before tax for the 2017 year was $325 million.

Qantas and Virgin Australia, major recipients of NAB’s corporate bookings, declined to comment when asked if they were aware of the issue.

Flight Centre shares closed down 2.14 per cent at $53.95.

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