AC cancels commissions for agents bookings
Dec 21, 2005, 4:36 pm
#1
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AC cancels commissions for agents bookings
My Travel agent just sent me this. Not very nice AC.
Air Canada – the Grinch who stole commissions
ACTA is lambasting Air Canada for deciding to end cash rewards on domestic tickets as of Jan. 9 for travel agents who aren’t deemed preferred suppliers, effectively ending automatic financial rewards the carrier and some of its affiliates pay.
The pre-Christmas announcement by the airline on the travel agent section of its web site stated that five per cent cash rewards paid by Air Canada on Latitude and Tango Plus fares, plus the five per cent paid on group bookings, will end Jan. 9. Already scheduled for Dec. 31 was the rescinding of a five-per-cent commission on flight passes purchased in Canada and the US.
Air Canada spokeswoman Isabelle Arthur defended the move, telling Travel Courier her airline will continue to financially reward agencies it recognizes as preferred suppliers and who “demonstrate their support on a continued basis.”
It wasn’t immediately clear what criteria the airline will use before designating an agency a preferred supplier and what degree of bookings an agency will have to make with Air Canada to reach a level of support that wins financial compensation from the airline.
ACTA chair Mike Merrithew denounced Air Canada’s move in a statement, charging, “It is clear Air Canada does not want to recognize the value of travel agents and is expecting them to work on its behalf for no base compensation. By further eliminating travel agency cash rewards for booking air tickets, the carrier is trying to shift all distribution costs to the consumer.”
Merrithew also said Air Canada’s move “will penalize all smaller travel agencies. In fact, smaller agencies serving Air Canada travellers are providing a valuable service to the airline as well and should be compensated a reasonable fee for performing these services.”
More than 70 per cent of airline bookings in this country are made through agents, Merrithew continued, adding ACTA urged its members to support Air Canada when it was in bankruptcy protection, only to now learn that the “support is one-sided.”
Air Canada is now seeing record load factors, thanks in large part to agents, he added.
Arthur says Air Canada is “convinced the travel agent has an important role to play,” citing a travel agent-dedicated web site.
The decision to do away with automatic commissions results from a business strategy aimed at lowering costs, she adds.
Merrithew said airlines that “continue to recognize and compensate” agents can count on the support of ACTA members.
Meanwhile, Australian travel agents will be also feeling the pinch from Air Canada in the New Year. The carrier will be dropping its base commission rate from nine to seven per cent for all sales after Jan. 1, 2006 to offset “increasingly challenging conditions of strong international competition and rising fuel prices.” Jeannie Foster, Air Canada’s general manager Down Under was quoted as saying, “Travel agents remain an important distribution channel for Air Canada, and we are continuing to support them to the best of our abilities.”
Air Canada – the Grinch who stole commissions
ACTA is lambasting Air Canada for deciding to end cash rewards on domestic tickets as of Jan. 9 for travel agents who aren’t deemed preferred suppliers, effectively ending automatic financial rewards the carrier and some of its affiliates pay.
The pre-Christmas announcement by the airline on the travel agent section of its web site stated that five per cent cash rewards paid by Air Canada on Latitude and Tango Plus fares, plus the five per cent paid on group bookings, will end Jan. 9. Already scheduled for Dec. 31 was the rescinding of a five-per-cent commission on flight passes purchased in Canada and the US.
Air Canada spokeswoman Isabelle Arthur defended the move, telling Travel Courier her airline will continue to financially reward agencies it recognizes as preferred suppliers and who “demonstrate their support on a continued basis.”
It wasn’t immediately clear what criteria the airline will use before designating an agency a preferred supplier and what degree of bookings an agency will have to make with Air Canada to reach a level of support that wins financial compensation from the airline.
ACTA chair Mike Merrithew denounced Air Canada’s move in a statement, charging, “It is clear Air Canada does not want to recognize the value of travel agents and is expecting them to work on its behalf for no base compensation. By further eliminating travel agency cash rewards for booking air tickets, the carrier is trying to shift all distribution costs to the consumer.”
Merrithew also said Air Canada’s move “will penalize all smaller travel agencies. In fact, smaller agencies serving Air Canada travellers are providing a valuable service to the airline as well and should be compensated a reasonable fee for performing these services.”
More than 70 per cent of airline bookings in this country are made through agents, Merrithew continued, adding ACTA urged its members to support Air Canada when it was in bankruptcy protection, only to now learn that the “support is one-sided.”
Air Canada is now seeing record load factors, thanks in large part to agents, he added.
Arthur says Air Canada is “convinced the travel agent has an important role to play,” citing a travel agent-dedicated web site.
The decision to do away with automatic commissions results from a business strategy aimed at lowering costs, she adds.
Merrithew said airlines that “continue to recognize and compensate” agents can count on the support of ACTA members.
Meanwhile, Australian travel agents will be also feeling the pinch from Air Canada in the New Year. The carrier will be dropping its base commission rate from nine to seven per cent for all sales after Jan. 1, 2006 to offset “increasingly challenging conditions of strong international competition and rising fuel prices.” Jeannie Foster, Air Canada’s general manager Down Under was quoted as saying, “Travel agents remain an important distribution channel for Air Canada, and we are continuing to support them to the best of our abilities.”
Dec 21, 2005, 5:58 pm
#2
Join Date: Sep 2005
Location: YYC
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what's wrong with this?
If an airline does not need any brokers to sell its seats, obviously why force it to hire brokers?
Traditionally airlines rely on travel agencies to sell seats and fill up flights. If the business model has changed, it does not rely on this sales channel, there is nothing wrong with it, right?
If an airline does not need any brokers to sell its seats, obviously why force it to hire brokers?
Traditionally airlines rely on travel agencies to sell seats and fill up flights. If the business model has changed, it does not rely on this sales channel, there is nothing wrong with it, right?
Dec 21, 2005, 6:07 pm
#3
Join Date: Mar 2004
Location: Canada
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Posts: 4,737
Originally Posted by lespoir
what's wrong with this?
If an airline does not need any brokers to sell its seats, obviously why force it to hire brokers?
Traditionally airlines rely on travel agencies to sell seats and fill up flights. If the business model has changed, it does not rely on this sales channel, there is nothing wrong with it, right?
If an airline does not need any brokers to sell its seats, obviously why force it to hire brokers?
Traditionally airlines rely on travel agencies to sell seats and fill up flights. If the business model has changed, it does not rely on this sales channel, there is nothing wrong with it, right?
Dec 21, 2005, 6:29 pm
#4
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Posts: 56,446
Originally Posted by brm744
My Travel agent just sent me this. Not very nice AC.
Air Canada – the Grinch who stole commissions
Air Canada – the Grinch who stole commissions
Dec 21, 2005, 10:46 pm
#5
Join Date: Apr 2002
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Originally Posted by ABG
agents still handle the majority of AC's volume......
The next question that I have is what % of agency tickets come from the big three (BTI, Amex, Thomas Cook?) [Are these even the big 3?]
Last edited by shuuy; Dec 21, 2005 at 10:51 pm
Dec 22, 2005, 7:30 am
#7
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I think the really unfortunate thing here for customers is that travellers that book thru agencies will face increased fees, service charges etc., just to cover the overhead of the TA. Booking through agencies still & always will have a great benefit, particularly in times of trouble, cnxls, or finding special or consolidator fares to Asia, Europe etc.
I feel worse for the agencies themselves, facing seriously diminished revenues...particularly when they only learn at Christmastime.
While I book "a to b" it's online usually, BUT only a TA (or some of us FT-ers!) can do the real challenging stuff. Most US & Canadian airlines have laid off tons of their res staff, leaving bookings largely to computers & web booking.
It's a shame that AC is doing this.
I feel worse for the agencies themselves, facing seriously diminished revenues...particularly when they only learn at Christmastime.
While I book "a to b" it's online usually, BUT only a TA (or some of us FT-ers!) can do the real challenging stuff. Most US & Canadian airlines have laid off tons of their res staff, leaving bookings largely to computers & web booking.
It's a shame that AC is doing this.
Dec 22, 2005, 9:06 am
#8
Join Date: Mar 2004
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Originally Posted by YYCOllie
Are business tickets that much more of a volume over leisure tickets (I believe the revenue is much larger... but is the volume difference truly significant?)
The next question that I have is what % of agency tickets come from the big three (BTI, Amex, Thomas Cook?) [Are these even the big 3?]
The next question that I have is what % of agency tickets come from the big three (BTI, Amex, Thomas Cook?) [Are these even the big 3?]
These moves don't really hurt the big 3 as you put it, minus TC which isn't really a big corporate player in Canada. According to " Tourism Plus " a french industry mag, the big 3 in Quebec are Amex, Vision 2000 and BTI.
I wish all TAs on this board a merry christmas... may all your waitlists clear!
Dec 22, 2005, 3:37 pm
#9
Join Date: Nov 2003
Location: Richmond, BC, Canada
Posts: 1,511
I wonder how much of the agency bookings are by "in-house" TA's (i.e. for larger corporations, agencies, associations, etc that have their own embedded TA) as opposed to retail TA's? And does the # quoted (70%) include on-line agencies?
There really has been a change in the business model and I'm sure it is and has been painful for many travel agencies. But, it would seem that the TA is now more of a service provider for the traveller than an agent for the airlines based upon the booking alternatives available that bypass the typical TA.
There really has been a change in the business model and I'm sure it is and has been painful for many travel agencies. But, it would seem that the TA is now more of a service provider for the traveller than an agent for the airlines based upon the booking alternatives available that bypass the typical TA.
Dec 22, 2005, 3:42 pm
#10
Join Date: Dec 2001
Location: YYZ
Posts: 6,138
Originally Posted by robsawatsky
I wonder how much of the agency bookings are by "in-house" TA's (i.e. for larger corporations, agencies, associations, etc that have their own embedded TA) as opposed to retail TA's? And does the # quoted (70%) include on-line agencies?
If ABG says the Top 3 agencies in Quebec are AMEX, Vision 2000 and BTI, I would think the 70% percent national figure would have to include the online giants. BTI is the agency behind Expedia.ca.