1 July sees the arrival of a new era of financial relationships between airlines and the Australian travel advisors who sell their seats and products for them on behalf of their clients. As of today, a number of carriers have now significantly cut commissions on all international tickets. So what does the trade think and what now?
When Qantas first announced 14 months ago that they would be slashing base commissions on all QF international fares for travel retailers (excluding trans-Tasman), the first of July 2022 has been the dreaded date that has been travelling ever closer since for Australian travel advisors.
At the time, Qantas Executive Manager, Global Sales & Distribution, Igor Kwiatkowski prefaced the need for all advisors to start charging fees as a replacement saying, “The (pandemic) crisis has driven a lot of permanent change in how airlines do business, and that’s clearly going to extend to agents as well.
“That’s why we’ve given more than twelve months’ notice, and we’ll be working closely with agents as they adapt their own business models and support their recovery.
“Agents deserve to be rewarded for the time, knowledge, expertise and research that goes into booking and managing travel and a service fee is a logical way to do that,” said Kwiatkowski.
Accelerating the commission-cutting runway towards a 1 July take-off has seen other airlines including Emirates, Singapore Airlines, Etihad, South African, American Airlines, British Airways, United, LATAM, Hawaiian Airlines, Malayasian and Air New Zealand all following suit with varying degrees of commission reductions.
Responding to the growing list of airlines cutting commissions, The Australian Federation of Travel Agents (AFTA) said in December 2021 that it was opposing the changes that some airlines had announced in relation to reducing fee structure.
CEO Dean Long said at the time, “Our members are voicing concerns about recent goings-on and are strenuously opposed to changes that some airlines seem to be contemplating that are geared towards forcing agency customers to pay more for international flights.
“This will have widespread adverse impacts on the travelling public, given that agents sell some 60% of the airfares sold in Australia.”
As it stands today, travel industry supply chain issues and mainstream media scrutiny are raging, particularly for aviation with the sector battling a global trend of flight delays and cancellations, worker strikes, sickness, surging airfares, lost and delayed baggage, credits, refunds and airline customer service centre on-hold wait times at unprecedented levels for irate customers and the obliging trade.
The super jumbo question now is, will 1 July’s commission changes collectively help solve some of these issues, or only further add to them?
Will the airlines that have maintained commission levels stand to gain even more from their relationships with travel advisors?
While this new ‘golden era’ of travelling again is largely positive for all, how could and should the industry work together to ensure it remains sustainable and benefit every chink in the chain?
Travel Advisors share their thoughts
To answer some of these curly questions, we took to our closed 7,000-member strong Together In Travel Facebook Group aka the brains trust to garner some insights from the travel professionals out there on the front line.
People who have been professionally and loyally promoting and selling airfares and creating and managing complex travel itineraries for a living, in numerous cases for decades.
Here’s a small sample of the many and mixed responses from travel advisors themselves to what is clearly a complex and controversial topic and a definitive travel industry moment in time.
“It’s a disappointing state of affairs. I don’t know any other industry either where you are an integral player in sales yet remuneration is literally non-existent.”
“Name me one other industry where you can sell millions of dollars worth of product and receive not a bean in return. If we want those airlines who currently pay commission to continue to do so we must reward them with increased sales.”
“Implemented them (fees) a long time ago, better to build an ark before it starts to rain. If people won’t pay an upfront travel planning fee and airfare booking fees then they aren’t my clients.”
“Shouldn’t we be supporting the clients who come in our door? I would rather have 1% of something and a loyal client base. Have we forgotten why we stayed in this job?“
“I question why you wouldn’t charge a service fee. Be upfront about it. Don’t be embarrassed. Do you see any other industry feel shame for charging for their services?”
“If we were paid 1% and had access to more private fares and incredible customer service I would understand but it appears that those paying commission to us are actually more supportive in their customer service too!”
“Obviously, our client’s needs come first but wherever possible I believe we need to support those who support us. Nothing works without mutual support. Our industry thrives on it.“
“With the lack of staffing, the constant disruption of flights & streams of angry, disgruntled passengers, I don’t see how this is a winning situation for these airlines. If they don’t think they need us now, watch this space as they figure it out pretty soon. My support will be directed at those who support us wherever possible always with my client at the forefront.“
“Best to just focus on what’s best for the client and the rest will look after itself.”
Today is 1 July, and the beginning of a new reality for the travel trade and all airline relationships.
What happens next? Only time will tell.
Have you got an opinion to share? We’d love to hear it. Please drop us a line at editor@karryon.com.au with your thoughts.