Wirraway
9th Mar 2004, 10:17
travelbiz.com.au/
AFTA claims JetStar will pay for ‘zero commission’ policy
AFTA has launched a blistering attack on JetStar and urged Australian travel agents to “support those who support them” after the low-cost carrier refused a request to rethink its strategy of charging consumers more to book through retailers.
AFTA chief executive Mike Hatton said the federation had on several occasions expressed concern at JetStar’s strategy of having a higher fare level available on its trade web site that its consumer web site.
Last week, however, the low-cost carrier confirmed it had no intention of changing its policy, which it claimed was “in the interests of transparency in pricing being available to the public”.
Hatton rejected the airline’s “excuse” and described the differential pricing scenario as “nothing less than a blatant attempt to gain business direct at the expense of the Australian agent distribution network.”
“AFTA’s policy is a very simple one,” he said. “Every supplier should pay an agent for the work that the agent does on behalf of the supplier, and any supplier that refuses to pay an agent for the agent’s work does not deserve any consideration or support from the agency distribution network.
“Any way one looks at what is intended by this airline, this is a move to zero commission in the Australian market place, and such a move creates a market environment that should be resisted by every thinking travel agent.”
Hatton said he was “heartily sick” of being told that because zero commissions had happened in Europe and the US then it had to happen in Australia.
“We are not Europe and we are not the United States, and we do not have 200 million people out there all eagerly awaiting the arrival of a low-cost carrier to purchase cheap tickets to travel.
“There can be no doubt that there are those in the public that want cheap no frills travel and will take advantage of such initiatives, but not on the scale that is constantly being touted as the overseas example.”
Hatton warned JetStar that its decision flew in the face of recent history.
“Who can forget the short-lived foray into the aviation market of Impulse – a carrier that ultimately failed through ridiculous pricing bought about by a fare war initiated by itself, and a carrier who in its arrogance refused to deal with the distribution network in this country.”
He also cited the decision by Ansett’s administrator to try and revive that airline by bypassing agents.
“When that decision was reversed and agents started to fill the seats on their aircraft, it was too late, as one senior Ansett pilot wrote in a letter published in the Melbourne newspapers at the time.”
Hatton said that if JetStar was allowed to get away with zero agent commission, other companies would follow its lead.
“If agents embrace what is proposed by JetStar, then there is no doubt that success for the airline will follow.
“However, if agents refuse to accept what is being imposed, then success for the airline may not be assured. Hence the time has come for every agent to make a decision in this regard – and when making that decision each will have to weigh up not only the immediate perceived threat or benefit, but also think long and hard about what these policies could mean for the future of their business.
“At the same time, JetStar would do well to consider the history of such policies in Australia.
“The time has come for the agency community in Australia to support those who support them. I am certain that we shall survive and prosper and that we shall be around long after those that are making the insane short term decisions of today have disappeared from the industry scene.”
March 2004
===========================================
AFTA claims JetStar will pay for ‘zero commission’ policy
AFTA has launched a blistering attack on JetStar and urged Australian travel agents to “support those who support them” after the low-cost carrier refused a request to rethink its strategy of charging consumers more to book through retailers.
AFTA chief executive Mike Hatton said the federation had on several occasions expressed concern at JetStar’s strategy of having a higher fare level available on its trade web site that its consumer web site.
Last week, however, the low-cost carrier confirmed it had no intention of changing its policy, which it claimed was “in the interests of transparency in pricing being available to the public”.
Hatton rejected the airline’s “excuse” and described the differential pricing scenario as “nothing less than a blatant attempt to gain business direct at the expense of the Australian agent distribution network.”
“AFTA’s policy is a very simple one,” he said. “Every supplier should pay an agent for the work that the agent does on behalf of the supplier, and any supplier that refuses to pay an agent for the agent’s work does not deserve any consideration or support from the agency distribution network.
“Any way one looks at what is intended by this airline, this is a move to zero commission in the Australian market place, and such a move creates a market environment that should be resisted by every thinking travel agent.”
Hatton said he was “heartily sick” of being told that because zero commissions had happened in Europe and the US then it had to happen in Australia.
“We are not Europe and we are not the United States, and we do not have 200 million people out there all eagerly awaiting the arrival of a low-cost carrier to purchase cheap tickets to travel.
“There can be no doubt that there are those in the public that want cheap no frills travel and will take advantage of such initiatives, but not on the scale that is constantly being touted as the overseas example.”
Hatton warned JetStar that its decision flew in the face of recent history.
“Who can forget the short-lived foray into the aviation market of Impulse – a carrier that ultimately failed through ridiculous pricing bought about by a fare war initiated by itself, and a carrier who in its arrogance refused to deal with the distribution network in this country.”
He also cited the decision by Ansett’s administrator to try and revive that airline by bypassing agents.
“When that decision was reversed and agents started to fill the seats on their aircraft, it was too late, as one senior Ansett pilot wrote in a letter published in the Melbourne newspapers at the time.”
Hatton said that if JetStar was allowed to get away with zero agent commission, other companies would follow its lead.
“If agents embrace what is proposed by JetStar, then there is no doubt that success for the airline will follow.
“However, if agents refuse to accept what is being imposed, then success for the airline may not be assured. Hence the time has come for every agent to make a decision in this regard – and when making that decision each will have to weigh up not only the immediate perceived threat or benefit, but also think long and hard about what these policies could mean for the future of their business.
“At the same time, JetStar would do well to consider the history of such policies in Australia.
“The time has come for the agency community in Australia to support those who support them. I am certain that we shall survive and prosper and that we shall be around long after those that are making the insane short term decisions of today have disappeared from the industry scene.”
March 2004
===========================================