It is unfair Airlines slash payments to Aussie travel agents
Travel agents are crying foul over the loss of multi-million-dollar commissions, soon to be slashed by Qantas and other major commercial airlines.
Qantas was the first airline to announce it was cutting agent commissions from five percent to one percent, Australia’s peak body for travel agents said, with a string of leading airlines including Emirates, Air New Zealand, Hawaiian Airlines, Singapore Airlines, Cathay Pacific and American Airlines soon following suit.
Australian Federation of Travel Agents (AFTA) boss Dean Long told 9news.com.au the move would pile huge pressure on smaller travel agents already buffeted by the worst downturn in travel since commercial passenger jet travel began.
The change would ultimately lead to a “lower level of competition” in the marketplace, Mr Long claimed, with the move pushing passengers towards buying their tickets online direct from the airlines.
“It is unfair,” he said.
“This is purely a cost shift by the majority of the airlines.”
Mr Long said Australian travellers are now more reliant than ever on agents to guide them through complex and fast-moving coronavirus restrictions.
Because of the cloud of uncertainty which hangs over international air travel, agents are now investing more and more time in ticket bookings, he said.
Once tickets are booked, agents are going back into the booking system multiple times to “touch” a ticket multiple times to make itinerary changes or checks, he said, so cutting commissions in the current environment was a bitter pill to swallow.
Mr Long said the decision was “very disappointing” and that lost commissions would cost Australian travel agents “in the millions”.
In a recent survey of its membership, AFTA found 58 percent of travel agents only expected a return to profit in the 2023-24 financial year.
Around 3.5 percent said they would “definitely” go out of business in 2022, while a further 10 percent had grave doubts they would be alive by the end of the year.
A recent survey by Finder found there had been a surge in the number of Australians booking flights through a travel agent because the level of administration required to travel during the pandemic is so high and overwhelming.
The fear of a trip being cancelled and uncertainty around travel requirements were big reasons Australians were now more likely to book through an agent, the survey found.
In announcing the change last year, Qantas executive Igor Kwiatkowski blamed it on brutal conditions facing the aviation sector.
“Like all airlines, Qantas is working to recover from the biggest crisis our industry has ever faced,” he said.
“Maintaining the status quo around our commission structure is no longer viable.”
The change to commissions would help Qantas try and reduce various operation costs by $1 billion each year,” he said.
“Given the billions of dollars of extra debt and lost revenue due to COVID, these cost reductions are central to our recovery plan.”
Mr Long of AFTA said it was “incorrect” for airlines to try and paint a picture that commissions had to be reduced now.
“Let’s be honest, airline commissions haven’t cost the airline industry a cent for the last two years, because you only get paid a commission on what you sell.
“So the idea that these decisions have to be made at the worst economic trading conditions the travel industry has faced in 100 years is just not correct.”
From April 1, Cathay Pacific will be the first airline to hack back commissions, with others initiating their own cutbacks over the course of the year.
Qantas will reduce its commissions from July 1.
