Australian travel agents cry foul after airlines slash multi-million-dollar commissions

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Australian Airlines, Quantas and Virgin Airlines
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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.

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.

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.

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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.

Source: 9News Australia

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