The market may be pushing higher on Thursday but the same cannot be said for the Flight Centre Travel Group Ltd (ASX: FLT) share price.
In late afternoon trade the travel company's shares are down by 2.5% to $53.77 compared to a 0.6% gain by the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO).
This means that its shares have fallen by a sizeable 7% since this time last week.
Why did Flight Centre's shares sink lower?
Today's decline appears to be attributable to a report in the Fairfax press which reveals that National Australia Bank Ltd (ASX: NAB) has dumped Flight Centre as its corporate travel provider.
According to the report, the banking giant is understood to have torn up a contract worth upwards of $30 million a year in gross bookings late last year after allegedly discovering that the travel company had been overcharging it.
Flight Centre's CEO Graham Turner has stated that it had a "commercial disagreement with NAB that was quickly and fully resolved last year." While this may be the case, NAB is believed to have switched the majority of its business over to American Express Corporate Travel now.
The report goes on to claim that the media outlet is aware of another top-50 ASX company that has not shortlisted Flight Centre for a recent tender due to the NAB issue which was the "worst-kept secret" in the travel industry.
Should you buy the dip?
While this story could potentially blow over by tomorrow, I do fear the alleged overcharging could have damaged its reputation within the industry. Especially if it turns out that NAB isn't the only one that has been impacted.
I would suggest investors hold off an investment in Flight Centre for the time being and wait for the dust to settle. In the meantime, I see a lot of value in Corporate Travel Management Ltd (ASX: CTD) and Webjet Limited (ASX: WEB) shares.
