Jetstar enrages agent at take-off (Robert Gottliebsen)
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Jetstar enrages agent at take-off (Robert Gottliebsen)
Wed "The Australian"
Jetstar Enrages Agent at take-off
May 26, 2004
ROBERT GOTTLIEBSEN
FLIGHT Centre chief Graham Turner has fired his first shot across the bow of Qantas chief Geoff Dixon's infant discount airliner Jetstar.
Jetstar is refusing to give significant commissions to travel agents, leaving Flight Centre, along with other travel agents, both angry and frightened by the move.
So Turner arranged with Google to have the first Jetstar search result to be connected directly to his Flight Centre internet site. As soon as you clicked through to Turner's counterfeit Jetstar, you were awash with offers from Virgin and Qantas.
In tiny print you were told that to make a Jetstar booking it was necessary to call into an agent's office.
Given that there is little commission for the agent, my guess is you would not be encouraged to make the Jetstar booking.
Mike Hatton, chief executive of the travel agents body AFTA, says that if Jetstar is allowed to get away with the "zero commission" policy, other companies will follow its lead.
Dixon probably agrees with him, and thinks that if Jetstar can bypass the agents and win, then perhaps in time Qantas can do the same thing.
It won't be easy for Jetstar.
The travel agents in Australia have an extensive customer database and closer contact with customers than the airlines.
When Virgin launched in Australia, it recognised this and gave a 5 per cent base commission plus negotiated payments for substantial support. Virgin ignored the "no commission" trends in Europe and the US.
On Jetstar's opening day yesterday, Turner's counterfeit Jetstar connection to Flight Centre had disappeared from Google and the first Jetstar search result went through to the company. But Turner had made his point.
Almost certainly Virgin CEO Brett Godfrey will use Jetstar's token commissions policy to increase his market share gains. He will be pointing out to agents that Jetstar is really Qantas, which is being two-faced, so it makes more sense to promote Virgin.
And to give key agents more incentive to book Virgin, he will probably structure agent commissions to help those who reward Virgin.
I encountered Turner's counterfeit Jetstar when I went to book a weekend Jetstar flight from Brisbane to Melbourne's Avalon airport.
The person travelling wanted to go south of Geelong, which is much closer to Avalon than Tullamarine airport.
The price quoted for that flight was $95, but via the Flight Centre site I found that Virgin was offering a flight at the same time and at the same cost, but arriving at Tullamarine.
Equal pricing represents a big challenge to the infant Jetstar -- its costs are fractionally above Virgin, so the larger discount airline is able to match Jetstar prices and not suffer. Accordingly, travel agents can white ant the Jetstar airline and funnel more people into Virgin.
Godfrey has made it clear he wants to use his 20-25 per cent cost advantage over Qantas to become Australia's largest domestic airline.
The equivalent Qantas fare from Brisbane to Tullamarine early on a Saturday morning was $145 -- 50 per cent more than Virgin.
That's a big difference and represents a clear danger to Qantas in off-peak and week-end travel.
Meanwhile Virgin is expanding rapidly into the regional and holiday routes that Jetstar is servicing.
And Godfrey knows he has the full backing of Turner and his large community of agents, many of whom have signs outside their store saying they can help travellers chose between Qantas, Virgin and Jetstar.
Not many Flight Centre customers will walk out choosing Jetstar.
==========================================
Jetstar Enrages Agent at take-off
May 26, 2004
ROBERT GOTTLIEBSEN
FLIGHT Centre chief Graham Turner has fired his first shot across the bow of Qantas chief Geoff Dixon's infant discount airliner Jetstar.
Jetstar is refusing to give significant commissions to travel agents, leaving Flight Centre, along with other travel agents, both angry and frightened by the move.
So Turner arranged with Google to have the first Jetstar search result to be connected directly to his Flight Centre internet site. As soon as you clicked through to Turner's counterfeit Jetstar, you were awash with offers from Virgin and Qantas.
In tiny print you were told that to make a Jetstar booking it was necessary to call into an agent's office.
Given that there is little commission for the agent, my guess is you would not be encouraged to make the Jetstar booking.
Mike Hatton, chief executive of the travel agents body AFTA, says that if Jetstar is allowed to get away with the "zero commission" policy, other companies will follow its lead.
Dixon probably agrees with him, and thinks that if Jetstar can bypass the agents and win, then perhaps in time Qantas can do the same thing.
It won't be easy for Jetstar.
The travel agents in Australia have an extensive customer database and closer contact with customers than the airlines.
When Virgin launched in Australia, it recognised this and gave a 5 per cent base commission plus negotiated payments for substantial support. Virgin ignored the "no commission" trends in Europe and the US.
On Jetstar's opening day yesterday, Turner's counterfeit Jetstar connection to Flight Centre had disappeared from Google and the first Jetstar search result went through to the company. But Turner had made his point.
Almost certainly Virgin CEO Brett Godfrey will use Jetstar's token commissions policy to increase his market share gains. He will be pointing out to agents that Jetstar is really Qantas, which is being two-faced, so it makes more sense to promote Virgin.
And to give key agents more incentive to book Virgin, he will probably structure agent commissions to help those who reward Virgin.
I encountered Turner's counterfeit Jetstar when I went to book a weekend Jetstar flight from Brisbane to Melbourne's Avalon airport.
The person travelling wanted to go south of Geelong, which is much closer to Avalon than Tullamarine airport.
The price quoted for that flight was $95, but via the Flight Centre site I found that Virgin was offering a flight at the same time and at the same cost, but arriving at Tullamarine.
Equal pricing represents a big challenge to the infant Jetstar -- its costs are fractionally above Virgin, so the larger discount airline is able to match Jetstar prices and not suffer. Accordingly, travel agents can white ant the Jetstar airline and funnel more people into Virgin.
Godfrey has made it clear he wants to use his 20-25 per cent cost advantage over Qantas to become Australia's largest domestic airline.
The equivalent Qantas fare from Brisbane to Tullamarine early on a Saturday morning was $145 -- 50 per cent more than Virgin.
That's a big difference and represents a clear danger to Qantas in off-peak and week-end travel.
Meanwhile Virgin is expanding rapidly into the regional and holiday routes that Jetstar is servicing.
And Godfrey knows he has the full backing of Turner and his large community of agents, many of whom have signs outside their store saying they can help travellers chose between Qantas, Virgin and Jetstar.
Not many Flight Centre customers will walk out choosing Jetstar.
==========================================
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And about time too.
People want to have "cheap fares" and if it means booking over the net and saving $5 or so then the punter would prefer that in their own pocket.
Travel agencies will be a thing of the past in about 10 years time and the owner of Flight Centres know this.
Would probably explain their fall from grace in terms of share price.
I dont know about you but having someone "pay" Google to deflect a legitimate search may open oneself up to potentially damaging litigation.
People want to have "cheap fares" and if it means booking over the net and saving $5 or so then the punter would prefer that in their own pocket.
Travel agencies will be a thing of the past in about 10 years time and the owner of Flight Centres know this.
Would probably explain their fall from grace in terms of share price.
I dont know about you but having someone "pay" Google to deflect a legitimate search may open oneself up to potentially damaging litigation.
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Just tried it and it still brings up about Flight Centre, and also off to the side the "Jetsafe" (ALAEA) web site?
Seems Jetstar has upset a lot of people already.
Seems Jetstar has upset a lot of people already.
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I'm with Timmee,
It is about time there was legislation covering internet, spam etc.
What Turner did was FRAUD and he should be jailed as such!
"So Turner arranged with Google to have the first Jetstar search result to be connected directly to his Flight Centre internet site. As soon as you clicked through to Turner's counterfeit Jetstar, you were awash with offers from Virgin and Qantas. "
I do not understand why people feel the need to feed agents for simple domestic travel, it is a different thing with longer more complicated holidays where they bulk buy packages, accom etc.
P.S: I am NOT a Jetstar lover
It is about time there was legislation covering internet, spam etc.
What Turner did was FRAUD and he should be jailed as such!
"So Turner arranged with Google to have the first Jetstar search result to be connected directly to his Flight Centre internet site. As soon as you clicked through to Turner's counterfeit Jetstar, you were awash with offers from Virgin and Qantas. "
I do not understand why people feel the need to feed agents for simple domestic travel, it is a different thing with longer more complicated holidays where they bulk buy packages, accom etc.
P.S: I am NOT a Jetstar lover
Moderate, Modest & Mild.
If airlines are willing to stop providing pax with inflight refreshments to save only a couple of dollars per head, slash employees wages for an even lesser saving, and in the case of Tiger Airways (Singapore) have crew pay for their uniforms, then I guess Travel agents must be fair game for the Geoff Dixons and Rod Eddingtons as well, who struggle on their multi million dollar packages!
Airlines are no longer a "service industry" from the upper management level point of view - they are a cow that's there to be milked for as much as they can squeeze out of it FOR THEMSELVES.
I wonder how many MORE "upper level", overpaid management positions have been created with the formation of JetStar.
This (airline) industry is becoming farcical for the number of non revenue productive staff it is producing at the expense of those who DO carry the load!
Airlines are no longer a "service industry" from the upper management level point of view - they are a cow that's there to be milked for as much as they can squeeze out of it FOR THEMSELVES.
I wonder how many MORE "upper level", overpaid management positions have been created with the formation of JetStar.
This (airline) industry is becoming farcical for the number of non revenue productive staff it is producing at the expense of those who DO carry the load!
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Timmee... the end of the Travel Agent has been predicted in USA since 1970 and Australia since 1983 as I know of. They're still going strong. They have the advantage of being where their clients are - on the street.
An international airline that I know of calculated that it was cheaper and safer (money wise, staff fraud, mistakes etc.) to scrap its own ticket offices and use agents for all ticketing. The 9% commission was also cost effective. They didn't do it because they couldn't rely on Travel Agents' support.
An international airline that I know of calculated that it was cheaper and safer (money wise, staff fraud, mistakes etc.) to scrap its own ticket offices and use agents for all ticketing. The 9% commission was also cost effective. They didn't do it because they couldn't rely on Travel Agents' support.
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Virgin Blue are not as saintly as we would have Flight Centre believe...
Read the most recent TravelTrade to find out all about Virgin Blue's most recent routine to emulate, what would appear to be, practices seen overseas from LCC's towards travel agents.
Would be interested to see what sort of legal ramifications exist for essentially hijacking the search results from a search engine (in co-operation with the company itself) all for the sake of advertising?
Whilst the death of the travel agency has long been a never-ending argument, travel agencies and businesses have evolved tremendously over the last decade, leaving many agencies marginalised and forcing amalgamation in some circumstances to ensure survival.
The advent of the internet in general has revolutionised the way in which many travellers make their airline bookings now. Sure, there will always be a place for the travel agency - just for how long, who knows?
Read the most recent TravelTrade to find out all about Virgin Blue's most recent routine to emulate, what would appear to be, practices seen overseas from LCC's towards travel agents.
Would be interested to see what sort of legal ramifications exist for essentially hijacking the search results from a search engine (in co-operation with the company itself) all for the sake of advertising?
Whilst the death of the travel agency has long been a never-ending argument, travel agencies and businesses have evolved tremendously over the last decade, leaving many agencies marginalised and forcing amalgamation in some circumstances to ensure survival.
The advent of the internet in general has revolutionised the way in which many travellers make their airline bookings now. Sure, there will always be a place for the travel agency - just for how long, who knows?
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Cheap publicity? Hardly.
Travel agents are trying to prevent a loss of income. If they feel that this income (commission) has been unjustly removed, they'll try to fight back.
As to who uses one of the most popular internet search engines in Australia? Hmmm...
Travel agents are trying to prevent a loss of income. If they feel that this income (commission) has been unjustly removed, they'll try to fight back.
As to who uses one of the most popular internet search engines in Australia? Hmmm...
"Equal pricing represents a big challenge to the infant Jetstar -- its costs are fractionally above Virgin, so the larger discount airline is able to match Jetstar prices and not suffer."
Since when??? On my understanding his is complete cr@p! Jetstar was set up with with a much lower cost base than VB
Since when??? On my understanding his is complete cr@p! Jetstar was set up with with a much lower cost base than VB
