Aer Lingus today announced changes in the structure of travel trade commissions in Ireland. The new base rate of commission is to be 1% with effect from 1st January 2003. Aer Lingus will also offer all agents a volume based remuneration scheme.
Commenting on this announcement Chief Operations Officer, Seamus Kearney, said “The customer is the winner today. This latest move in reducing our distribution costs is part of our ongoing programme of reducing all of our costs so that we can provide consistently lower fares to our customers.”
In the past 12 months Aer Lingus has reduced its cost base by over €200 million and recently announced that the airline had embarked on a further tranche of cost reduction of €130 million. Customers have benefited directly from these actions. During this period Aer Lingus has:
- Made over 3 million low fares available at prices up to 60% cheaper than the previous year—Announced the start of nine new routes—Reduced its distribution costs by closing its travel shops and reducing its own staffing levels.
Seamus Kearney explained the thinking behind today`s announcement: “The travel business is changing fundamentally. To build a profitable business and to give the customers the prices and service they want we are changing also. Our business strategy is simple. We are committed to providing lower fares to our customers. To enable us to do this we are equally committed to reducing our cost base. We have already made good progress in cost reduction but it is a never-ending journey and we will continue to examine every item of cost in the business and reduce or eliminate it where necessary.”
He went on to explain how the travel trade itself was also changing: “The travel agency business and its relationship with the airlines and with its customers is changing. I believe that the structure we are announcing reflects the changed role of travel agents in the distribution of airline tickets.”
Seamus Kearney concluded his comments by saying he was delighted with the customer response to the low fares now available from Aer Lingus: “Customers are voting with their feet in response to the wide availability of our low fares and our high standards of customer service. We have made a lot of progress in reducing economy fares and we now plan to move on to tackle the issue of the cost of business travel.”