Emirates (EK) is the latest carrier to slash travel advisor commissions from 1 July 2022, citing a changing trading environment due to the pandemic as the deciding factor.
Effective 01 Jul 2022, EK will vastly reduce its travel advisor partner base commissions for EK fares issued in Australia and New Zealand, including:
- Moving to paying 0% commission on all trans-Tasman flights
- Dropping from paying 5% commission to 1% on long-haul Economy Class to South East Asia, Dubai & beyond
- and reducing from paying 6% to 2% on long-haul First & Business Class for South-East Asia, Dubai & beyond
In a trade update, the Dubai based carrier said “The travel industry has been severely impacted by the global pandemic and our own losses during the last 20 months have been a reflection of this severity.”
“The flow-on effect has extended through our travel agency partners, bringing extreme and continuing pressure on business models. This is therefore a time for change.
“We have studied other globally sophisticated markets where these types of changes have been successfully implemented, and we firmly believe that now is the right time for our industry to adopt new ways of working.”
EK said it remains “committed to rewarding its agency partners” and offering ongoing support with GDS compatibility, as it works towards the integration of its Emirates Gateway suite of digital and personalised content products.
Earlier in the year, EK announced it would be slapping on a surcharge of between US$14 (AU$18) and US$25 (AU$32) per ticket depending on sector length for all GDS bookings from July 1, 2021, saying at the time that the reason for the new charges was to offset the rising costs of selling tickets through traditional distribution platforms.
On the same day the change came into effect, July 1, the airline launched a range of enhanced content and services on its own NDC-enabled direct platform, Emirates Gateway.
In response to the latest commission cuts, Australia Federation of Travel Agents CEO Dean Long said “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.”
“Some suppliers have announced mutually beneficial support programs for the travel sector and our customers, which we believe are being finalised and are likely to be well received and supported. These programs will be critical in ensuring Australian consumers are not worse off and we continue to have a vibrant distribution network.”
AFTA said it is not involved in the commission negotiations between its members and the individual airlines but remained concerned about the impact of commission cuts on overall margin and suggestions that agency groups introduce new fees to offset any loss.
“There are already stated concerns about the consolidation and removal of competition through codeshare arrangements. AFTA believes that these reductions will further reduce competition and choice.”
“As part of the focus on maintaining a fair market, changes in fees only serve to decrease competition, create an uneven playing field and lower service levels to Australians. As part of AFTA’s ongoing engagement with the ACCC, we will be directly raising these member concerns about the behaviour of these suppliers”
“We are providing a six-month window for our account executives to work with and support our key industry partners during the transitional phase,” the airline said.
The move follows other airlines including Qantas, Air New Zealand, and Garuda who have also cut commissions for travel advisors, slated to begin from 1 July 2022.