British Airways is to introduce a fundamental change to the way the airline works with UK travel agents following extensive consultation with agents and customers. The current standard seven per cent commission payment will be replaced by a fairer and clearer structure.
British Airways will pay agents for the basic service of making a booking, issuing travel documents and collecting the fare. Agents will be free to charge additional fees for any other services which customers require such as dedicated service desks and travel policy advice. Some fares will be adjusted to take this new scheme into account. This will come into effect on 1 January 2001.
In line with British Airways’ strategy to focus on the business market the airline will also be introducing rewards for agents who undertake activities which help to sell and market business fares. This will come into effect on 1 April 2000.
Tiffany Hall, British Airways Head of UK and Ireland Sales said: “The new scheme makes it clearer what we pay agents for and what customers pay agents for directly. As a result it will encourage process efficiencies, and in the long term it will drive down distribution costs and increase revenue contribution.
“The travel industry is changing. The advent of low cost carriers and the development of e-commerce are having a major impact on the way flights are sold. Customer needs are also changing with air travellers demanding greater choice, better value for money and more transparency. We need a new agency remuneration structure which takes into account these changes.
“The current remuneration does not reflect the work that travel agents are doing for us. Travel agents’ work on higher fares is not substantially greater than work on low fares but they can earn 100 times more.
“At the moment the customer pays the travel agent the same price, whether the customer requires the basic service or a more complex service. The new scheme means that the customer can choose the level of service they require from the agent and know exactly what they are paying for.
“We want to reward agents fairly for what they do on our behalf and believe that the new scheme more accurately reflects the work they do for us. We believe the new scheme will encourage longer term and closer relationships between agents and British Airways, as well as giving the agents opportunities for increased earnings.”
British Airways will continue working with key travel partners and trade bodies to finalise the details of the scheme. The airline will be arranging training sessions to help travel agents prepare for these changes in conjunction with the Guild of British Travel Agents.
Don Lunn, Chairman of the GBTA said: “We have worked closely with British Airways over the last few months and accept the basic principles of the new scheme. We are committed to working together to ensure the industry’s infrastructure is ready to take on the new requirements and to make this scheme beneficial for the consumer and the agency community as well as British Airways.”