Qantas has today informed its travel agency partners of major upcoming changes to its commission structure for international flights, which will switch over from July 2022.
As of 1 July 2022, Qantas will reduce its commission paid to travel agents for all Qantas international fares (excluding trans-Tasman) from 5 per cent to 1 per cent.
Qantas says today’s annoucement, 14 months out from the commission reduction, aims to give the industry time to adapt to the new changes and financial impact of selling Qantas internationally.
The airline says that this will be the first time Qantas has adjusted commission on international fares in more than 15 years and was flagged as part of the airline’s three-year COVID recovery plan.
Many Qantas fare types sold by agents are already not eligible for commission today, including domestic and trans-Tasman tickets, corporate fares and group bookings, with Qantas’ saying its changes to international commission, are in line with global trends.
The airline says the change will likely accelerate the growing industry trend towards a “fee for service” model for agents that have already taken place in many markets overseas and already exists with many agencies across Australia today. Something which Qantas says it will work with the agency community on to develop ways to evolve their business models and grow again.
Qantas says charging a fee compensates travel agents for the added value and bespoke service they provide customers beyond the logistics of booking, particularly for managing complex itineraries.
Qantas says it remains committed to its existing program of investing in new technology to make it easier for the industry to service customers and provide new selling (and revenue) opportunities not currently available through traditional travel agent booking systems.
More features will be introduced in the coming months, offering customers a more personalised service when booking through a travel agent.
Speaking about today’s annoucement, Qantas Executive Manager, Global Sales & Distribution, Igor Kwiatkowski, said, “Like all airlines, Qantas is working to recover from the biggest crisis our industry has ever faced.
“Maintaining the status quo around our commission structure is no longer viable, and the changes we’re making form part of the work underway right across the business to reduce our costs by $1 billion each year. Given the billions of dollars of extra debt and lost revenue due to COVID, these cost reductions are central to our recovery plan.
“We know our travel agency partners have also been hit hard by COVID-19. The 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 giving more than twelve months’ notice, and we’ll be working closely with agents as they adapt their own business models and support their recovery.
“Globally, we’ve seen a significant shift away from traditional commissions to a service-fee model. The Australian peak travel industry body (AFTA) has also recently acknowledged this shift and how important it was for agents to evolve and become less reliant on commissions.
“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.
“Our travel agent partners have a key role to play in supporting our mutual customers. That’s why we’re collaborating with the industry through this recovery phase on things like international restart and digital health passes. And we’re committed to continuing to invest in new technology to provide agents with a bigger toolkit of fares and products than what they can offer customers today.” Mr Kwiatkowski said.
