British Midland has confirmed that there will be no immediate reduction to the existing structure of commission levels to the travel trade. Rates will be held at 7.5% for domestic routes and 9% for international routes.
The decision to maintain commission levels has been adopted following a period of intense consultation with the travel trade. During these discussions, the airline highlighted to agents the lack of any visible benefit towards British Midland following British Airway’s decision to cut commission rates at the beginning of 1998.
In holding commission levels, British Midland has responded to assurances and pledges of support from the travel trade who had sought the opportunity to visibly demonstrate their commitment to British Midland over a greater period of time. An extended period also gives an opportunity to travel agents to examine the ways they conduct, and could possibly change, their own business.
Austin Reid, group managing director, said:
“The decision is a clear indication of our willingness to listen to the views of the travel trade and believe this is a positive step in our relationship with our trade partners.
“However, we can only judge the success of our decision on the future increased levels of support that we receive from the travel trade. We have been denied the opportunity, available to our competitors, of reinvesting in the business, those savings made from commission cuts.
“It is therefore imperative that we have to see clear evidence of greater support in increased sales in order to remain competitive and vindicate our decision.”