Qantas to slash commissions
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Qantas to slash commissions
Wed "Sydney Morning Herald"
Qantas to slash commissions
By Scott Rochfort
September 8, 2004
Qantas is expected to announce on Friday a massive cut in the commissions paid to travel agents - a move expected to save the airline tens of millions of dollars a year and sound the death knell for hundreds of travel agents nationwide.
Amid talk Qantas is preparing to slash its commissions for domestic and trans-Tasman flights from 5 per cent to 1 per cent from mid 2005, the airline's head of sales and distribution, Rob Gurney, said: "The current commission structure is simply not sustainable in such a low fare environment.
"Similar changes have already been made overseas, with travel agents adjusting to new remuneration models, including the collection of service fees."
Qantas would not confirm talk it was also looking to cut international commissions from 9 per cent to 7 per cent on January 1.
Several foreign airlines servicing Australia, including Singapore Airlines, are expected to reconsider their own commission structures after Qantas makes the first move.
The chair of the Australian Federation of Travel Agents, Ian Carew-Reid, said: "We're not happy about it because it will affect our members detrimentally."
But Mr Carew-Reid said it remained to be seen whether the move would have the same impact as the removal of commissions in the US several years ago, which resulted in 25 per cent of travel agents going out of business.
"Any reduction in revenue earnings for agents is going to hit them very hard," Mr Carew-Reid said. "Some harder than others. If Qantas decide to do this there's not much more we can do but ask for more time."
The managing director of executive travel company Wall Street Travel, Ben Caplan, said the reduced commissions would devastate segments of the industry and lead to job losses.
"Whenever anyone brings in a new pricing system it means lower income," Mr Caplan said, warning that the move would eventually lead to higher air fares, given agents would have to raise the fees charged to customers.
"Agents have to be reimbursed somehow," he said.
Yet, given Qantas rewards travel agents if they achieve certain volume targets, some agents - particularly at the larger end of the industry - have played down the impact of reduced commissions.
Flight Centre's general manager for strategy, Paul Scurrah, said the cut in commissions would result in a "shift from the front to back end", with a higher focus on agents having to meet sales targets set by Qantas.
"It's a pure business decision to them as to what they [Qantas] do," Mr Scurrah said.
Noting the recent experience in the US, Mr Scurrah said carriers in the country were beginning to acknowledge they had to support travel agents better.
"They are understanding that they need to reward the trade," he said.
Qantas shares rose 2c to $3.33.
============================================
Qantas to slash commissions
By Scott Rochfort
September 8, 2004
Qantas is expected to announce on Friday a massive cut in the commissions paid to travel agents - a move expected to save the airline tens of millions of dollars a year and sound the death knell for hundreds of travel agents nationwide.
Amid talk Qantas is preparing to slash its commissions for domestic and trans-Tasman flights from 5 per cent to 1 per cent from mid 2005, the airline's head of sales and distribution, Rob Gurney, said: "The current commission structure is simply not sustainable in such a low fare environment.
"Similar changes have already been made overseas, with travel agents adjusting to new remuneration models, including the collection of service fees."
Qantas would not confirm talk it was also looking to cut international commissions from 9 per cent to 7 per cent on January 1.
Several foreign airlines servicing Australia, including Singapore Airlines, are expected to reconsider their own commission structures after Qantas makes the first move.
The chair of the Australian Federation of Travel Agents, Ian Carew-Reid, said: "We're not happy about it because it will affect our members detrimentally."
But Mr Carew-Reid said it remained to be seen whether the move would have the same impact as the removal of commissions in the US several years ago, which resulted in 25 per cent of travel agents going out of business.
"Any reduction in revenue earnings for agents is going to hit them very hard," Mr Carew-Reid said. "Some harder than others. If Qantas decide to do this there's not much more we can do but ask for more time."
The managing director of executive travel company Wall Street Travel, Ben Caplan, said the reduced commissions would devastate segments of the industry and lead to job losses.
"Whenever anyone brings in a new pricing system it means lower income," Mr Caplan said, warning that the move would eventually lead to higher air fares, given agents would have to raise the fees charged to customers.
"Agents have to be reimbursed somehow," he said.
Yet, given Qantas rewards travel agents if they achieve certain volume targets, some agents - particularly at the larger end of the industry - have played down the impact of reduced commissions.
Flight Centre's general manager for strategy, Paul Scurrah, said the cut in commissions would result in a "shift from the front to back end", with a higher focus on agents having to meet sales targets set by Qantas.
"It's a pure business decision to them as to what they [Qantas] do," Mr Scurrah said.
Noting the recent experience in the US, Mr Scurrah said carriers in the country were beginning to acknowledge they had to support travel agents better.
"They are understanding that they need to reward the trade," he said.
Qantas shares rose 2c to $3.33.
============================================
Moderate, Modest & Mild.
Good ole Dicko - slashing everyone else's income, except his, of course!
How many people's lives is this man willing to destroy, to supplement his already substantial salary and package with another multi-million dollar BONUS?
Anyone heard from East West Loco recently?
He used to be a regular contributor here - with quite a well balanced view of aviation matters.........much like moir
The managing director of executive travel company Wall Street Travel, Ben Caplan, said the reduced commissions would devastate segments of the industry and lead to job losses.
Anyone heard from East West Loco recently?
He used to be a regular contributor here - with quite a well balanced view of aviation matters.........much like moir
Kaptin M
Is it all CEO's that you have a bone to pick with, or just Geoff Dixon?
One of the roles of the CEO is to manage the company (through the staff) to achieve the most favorable financial results and thereby achieve maximal return on shareholders capital. Are you suggesting that Geoff Dixon is wrong in what he is attempting to do?
If you think that Geoff Dixon is overpaid, perhapsyou should present some form of justification? Have a look at the Comparison of CEO Salary and judge the figures for yourself - to my minds eye, I don't think Dixon is overpaid at all. In light of recent record results for the company, he has probably been underpaid. Compared with Brett Godfrey, he has certainly been underpaid.
The world airline environment has changed, due to the shift towards the low cost model, and CEO's of 'legacy' airlines have to either shape their companies up, or watch them slide into obscurity & bankruptcy. e.g look at what's happening in Europe right now
I don't necessarily agree with the current Qantas philosophy of cutting costs as a solitary long term strategy, but in the short term it appears to be working very well. Qantas is making record profits, and ensuring that it continues to remain profitable in an industry that is undergoing huge structural change. As such, I find it any call that the Qantas CEO is overpaid to be a hard argument to swallow...
Is it all CEO's that you have a bone to pick with, or just Geoff Dixon?
One of the roles of the CEO is to manage the company (through the staff) to achieve the most favorable financial results and thereby achieve maximal return on shareholders capital. Are you suggesting that Geoff Dixon is wrong in what he is attempting to do?
If you think that Geoff Dixon is overpaid, perhapsyou should present some form of justification? Have a look at the Comparison of CEO Salary and judge the figures for yourself - to my minds eye, I don't think Dixon is overpaid at all. In light of recent record results for the company, he has probably been underpaid. Compared with Brett Godfrey, he has certainly been underpaid.
The world airline environment has changed, due to the shift towards the low cost model, and CEO's of 'legacy' airlines have to either shape their companies up, or watch them slide into obscurity & bankruptcy. e.g look at what's happening in Europe right now
I don't necessarily agree with the current Qantas philosophy of cutting costs as a solitary long term strategy, but in the short term it appears to be working very well. Qantas is making record profits, and ensuring that it continues to remain profitable in an industry that is undergoing huge structural change. As such, I find it any call that the Qantas CEO is overpaid to be a hard argument to swallow...
Not everyone seems to agree with you Kaptin M; the quote below was taken from the AFR Boss Magazine: Measuring the CEO's
Interestingly enough, Geoff Dixon appears as a case in point:
So - perhaps you can save all of the remuneration boards around the country a lot of work & define a new across the board standard by which CEO's remuneration is calculated?
Interestingly enough, Geoff Dixon appears as a case in point:
One of the most difficult issues for remuneration committees to grapple with is choosing the appropriate benchmarks by which to judge a CEO’s performance. The smorgasbord includes Stern Stewart’s economic value added (EVA) return on capital employed; total shareholder returns; and simple earnings per share growth.
Dick Warburton, a former CEO who sits on several company boards, says that what is appropriate one year may cease to be so down the track as the macro-environment changes. In his words, “it’s bloody difficult” to select the right one. One year the company may be seeking rapid market share growth and earnings per share is thus the correct hurdle to be put in place. The next year, it will be seen to be more important to strengthen the balance sheet, so return on funds employed is a more suitable test.
Qantas boss Geoff Dixon is an interesting case in point. On the face of it he hasn’t done very well, with a TSR of minus 27 per cent and EPS growth of minus 39 per cent. But few would seriously doubt that he has done an admirable job steering Australia’s flagship carrier through its most turbulent period, which has included the threat of terrorism, the SARS outbreak and the war in Iraq.
There is only one certainty left in the great pay debate, which is that the increased disclosure of remuneration policies and executive pay is only going to lead to more discussion and analysis. It may be uncomfortable for CEOs, but it’s now a fact of life in corporate Australia.
Dick Warburton, a former CEO who sits on several company boards, says that what is appropriate one year may cease to be so down the track as the macro-environment changes. In his words, “it’s bloody difficult” to select the right one. One year the company may be seeking rapid market share growth and earnings per share is thus the correct hurdle to be put in place. The next year, it will be seen to be more important to strengthen the balance sheet, so return on funds employed is a more suitable test.
Qantas boss Geoff Dixon is an interesting case in point. On the face of it he hasn’t done very well, with a TSR of minus 27 per cent and EPS growth of minus 39 per cent. But few would seriously doubt that he has done an admirable job steering Australia’s flagship carrier through its most turbulent period, which has included the threat of terrorism, the SARS outbreak and the war in Iraq.
There is only one certainty left in the great pay debate, which is that the increased disclosure of remuneration policies and executive pay is only going to lead to more discussion and analysis. It may be uncomfortable for CEOs, but it’s now a fact of life in corporate Australia.
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Hi Kaptin and everyone.
Yes, the Loco is still around.
We have been expecting this for quite a while, and are prepared to reshape the model. I would however like to see every Agent in Australia boycott the Rat for a week and see how their system holds up without our support. It wont happen though.
I am how ever sure that just about every Agent would like to give Mr Dixon and his imported Paddy twit at JetScar a barbed wire enema.
We will do fine, just restructure how we do things. It will be very interesting to see what happens to DJ loads, as the majority of agents have signed a 5 + 2 + 1 deal with them.
Might be a good time to snaffle a few DJ shares methinks??
Best all
EWL
Yes, the Loco is still around.
We have been expecting this for quite a while, and are prepared to reshape the model. I would however like to see every Agent in Australia boycott the Rat for a week and see how their system holds up without our support. It wont happen though.
I am how ever sure that just about every Agent would like to give Mr Dixon and his imported Paddy twit at JetScar a barbed wire enema.
We will do fine, just restructure how we do things. It will be very interesting to see what happens to DJ loads, as the majority of agents have signed a 5 + 2 + 1 deal with them.
Might be a good time to snaffle a few DJ shares methinks??
Best all
EWL
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Good to see you are still around, EwL, we can count on a balanced reporting of the effects of GD's policies on the Travel Agent business.
Kind regards,
TheNightOwl.
Kind regards,
TheNightOwl.
Moderate, Modest & Mild.
First of all. "Welcome back, EWL - long time no see."
No Johnny, it is not all CEO's that I have a problem with.
As you have raised Brett Godfrey's name as a comparison, I can only say that comparing those two is akin to comapring chalk and cheese.
Brett Godfrey constructed the entire business plan on which Virgin Blue runs - and he then grew it...very, very successfully, using his own formulae.
OTOH, Geoff Dixon (GOD), has not - imho - introduced any greatly innovative ideas, but rather has adopted the "Razor method" of slashing staff numbers and staff working conditions.
This
...is the greatest load of bollocks, and blowing smoke up His rear end, that I have read. Please outline, precisely, what unique strategies GOD incorporated to "steer Australia's flagship carrier" through these 3 events.
WHY should "the increased disclosure of remuneration policies and executive pay..be uncomfortable for CEOs?
Perhaps one answer might be that there is a LOT more that has yet to be disclosed, that has not yet been.....the TOTAL package.
One of the biggest changes I have noted in many airlines, over the past decade or so, is the merciless slashing of "front Line" staff (and their conditions), but the abnormal INCREASE in the numbers of "managers" - highly remunerated "suits" that occupy expensive office space, attend countless meetings, usually have their own secretary, and spend most of the day staring at computer terminals.
No Johnny, it is not all CEO's that I have a problem with.
As you have raised Brett Godfrey's name as a comparison, I can only say that comparing those two is akin to comapring chalk and cheese.
Brett Godfrey constructed the entire business plan on which Virgin Blue runs - and he then grew it...very, very successfully, using his own formulae.
OTOH, Geoff Dixon (GOD), has not - imho - introduced any greatly innovative ideas, but rather has adopted the "Razor method" of slashing staff numbers and staff working conditions.
This
But few would seriously doubt that he has done an admirable job steering Australia’s flagship carrier through its most turbulent period, [i]which has included the threat of terrorism, the SARS outbreak and the war in Iraq.[/b]
WHY should "the increased disclosure of remuneration policies and executive pay..be uncomfortable for CEOs?
Perhaps one answer might be that there is a LOT more that has yet to be disclosed, that has not yet been.....the TOTAL package.
One of the biggest changes I have noted in many airlines, over the past decade or so, is the merciless slashing of "front Line" staff (and their conditions), but the abnormal INCREASE in the numbers of "managers" - highly remunerated "suits" that occupy expensive office space, attend countless meetings, usually have their own secretary, and spend most of the day staring at computer terminals.
Sorry I thought this thread was about Qantas reducing the commission that they pay to agents?
A visit to any reasonable size shopping centre reveals at least three small travel agents. Is this triplication really necessary? All selling similar (the same?) product at about the same price. It is a little like the old days of a petrol station on every corner. If some agents go out of business they were probably marginal in the first place.
My experience when booking international travel through agents has been that they seem to employ young people who have done the minimum basic training and are then thrown in to flog tickets off a computer system. They seem to have less idea of how to book things like open jaw tickets than I do. As for domestic travel, I have been booking myself on line for the last two years and I am very happy with the service that I provide.
Ahhhhh capitalism at work. Those that provide a good service at a competitive price will survive. Those agents that are merely data entry clerks on a computer booking system will disappear.
Now East West Loco, tell me why I am wrong.
A visit to any reasonable size shopping centre reveals at least three small travel agents. Is this triplication really necessary? All selling similar (the same?) product at about the same price. It is a little like the old days of a petrol station on every corner. If some agents go out of business they were probably marginal in the first place.
My experience when booking international travel through agents has been that they seem to employ young people who have done the minimum basic training and are then thrown in to flog tickets off a computer system. They seem to have less idea of how to book things like open jaw tickets than I do. As for domestic travel, I have been booking myself on line for the last two years and I am very happy with the service that I provide.
Ahhhhh capitalism at work. Those that provide a good service at a competitive price will survive. Those agents that are merely data entry clerks on a computer booking system will disappear.
Now East West Loco, tell me why I am wrong.
Kaptin M
Much of the criticism that you level at Dixon can also be levelled at Brett Godfrey.
Admittedly, Godfrey did introduce Virgin Blue into the Australian market. To PRoclaim that he is some sort of boy wonder, who had a flash of brilliance & forever changed the world of aviation, is a long strecth. The model for Virgin came from Godfreys time as CEO of Virgin Express, and is based primarily on the "Southwest model" - as per Godfreys own words:
Does this mean that you also hold Alan Joyce in such high regard? After all, he introduced 'equally revolutionary' concepts to Australian aviation, such as operating from secondary airports, no designated seating, checkin cut-off times etc - all of which has served to batter the DJ bottom line & contributed to sharp decreases in DJ profits.
Some would argue that the very factors that propelled Virgin Blue to their sizeable market share were the very same factors that helped Qantas ride out the effects of the Gulf War & the SARS crisis - namely the collapse of Ansett. The true test of Godfreys performance as a leader & innovator will occur now that he has to battle an airline operating to an almost identical model & cost base, rather than being able to secure market share through low fares.
Getting back to the issue at hand - what level of remuneration do you suggest would be acceptable for Geoff Dixon? What sort of premium to this should Godfrey attract, for being such an innovator, bearing in mind the differences in market capitalisation between Qantas & Virgin Blue?
Over to you - I'll be interested to see if you can come up with some sort of numbers to justify your claims. Out of interest, what was Godfreys remuneration for last year?
Much of the criticism that you level at Dixon can also be levelled at Brett Godfrey.
Admittedly, Godfrey did introduce Virgin Blue into the Australian market. To PRoclaim that he is some sort of boy wonder, who had a flash of brilliance & forever changed the world of aviation, is a long strecth. The model for Virgin came from Godfreys time as CEO of Virgin Express, and is based primarily on the "Southwest model" - as per Godfreys own words:
Virgin Blue's business plan is closely based on Southwest Airlines [LUV], CEO Brett Godfrey told World Airline News. "Frequency, punctuality and affordability are key to our strategy," he explained. "This will give us the ability to tap into a new market, one which would not have considered air travel previously."
Some would argue that the very factors that propelled Virgin Blue to their sizeable market share were the very same factors that helped Qantas ride out the effects of the Gulf War & the SARS crisis - namely the collapse of Ansett. The true test of Godfreys performance as a leader & innovator will occur now that he has to battle an airline operating to an almost identical model & cost base, rather than being able to secure market share through low fares.
Getting back to the issue at hand - what level of remuneration do you suggest would be acceptable for Geoff Dixon? What sort of premium to this should Godfrey attract, for being such an innovator, bearing in mind the differences in market capitalisation between Qantas & Virgin Blue?
Over to you - I'll be interested to see if you can come up with some sort of numbers to justify your claims. Out of interest, what was Godfreys remuneration for last year?
... And how much commision does VIRGIN pay travel agents?
Kap, you often seem to imply airlines are some sort of benevelent society, doling out money to all and sundry. Might be something to do with the fact you've never actually worked in a de-regulated, free market industry.
I'm afraid travel agents as we've known them are an anachronism rapidly being overtaken by technology. EWL seems to realise this and is adapting acordingly. Any that don't are toast, like any business (Ansett springs to mind) that doesn't change with the times.
Kap, you often seem to imply airlines are some sort of benevelent society, doling out money to all and sundry. Might be something to do with the fact you've never actually worked in a de-regulated, free market industry.
I'm afraid travel agents as we've known them are an anachronism rapidly being overtaken by technology. EWL seems to realise this and is adapting acordingly. Any that don't are toast, like any business (Ansett springs to mind) that doesn't change with the times.
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Well Icarus, it's like this.
Yes - many Travel Agencies do employ spotty little hermans just out of training courses and let them loose on the general public simply because they cannot afford to pay for seniors due to high city rents - competition etc. This is not something we do.
My agency is majority high care corporate, and yes we do understand one-way backhauls, HIP points etc etc and more often than not wind up constructing fares manually or by sector to save the client money and check Sabre for errors.
Take the likes of a Grace L Ferguson Travel and Storm Shutters inc, trading away happily for 10 years in a shopping centre and shock-horror - a Fright Centre moves in next door complete with more spotty Hermans behind the counter with absolutely no knowledge of fares and ticketing (all done in Brisvegas). Grace L and co have to reduce overheads to handle the discounting, so as seniors depart, retire, fall off perch or whatever they replace them with a junior to stay afloat. So now you have 2 agents that know nothing at the front end. Yes we do have a Fright Centre in town and they are no threat to us but are making life hard for the agencies looking for the VFR traffic. They are not overly clever either as every time someone has come in here after going there first, our standard formula has undercut them without seeing what we had to beat first. Marketing - that is all it is.
You are right in saying the marginal agencies without a niche are likely to go under. Maybe they are past use-by and would have anyway.
As for domestic travel - here is an interesting one! Did you realise booking with your credit card online with QF and JQ was not secure? DJ is, but the others - no!! I know of instances where credit card numbers have been collected and used fraudulently.
The way we are set up, we can sell web fares on the Sabre system, with a fee per sector in the future (now $10.00 per leg on JQ) and still make a living. Corporates will happily pay for us to quickly compare the 3 incumbents and give them the cheapest deal without them having to wade through 3 booking engines themselves and taking ages to do it.
It is going to be an interesting couple of years, but if one thing is constant in any part of the travel industry it is most certainly change.
Best regards
EWL
Oh - and Virgin pay agents who have been actively selling them 5% on a monthly basis + 2% for reaching target amount +1% overide for a target percentage increase. This has weeded out the non producers and gives them an incentive to produce, and the producers an incentive to increase.
EWL
Yes - many Travel Agencies do employ spotty little hermans just out of training courses and let them loose on the general public simply because they cannot afford to pay for seniors due to high city rents - competition etc. This is not something we do.
My agency is majority high care corporate, and yes we do understand one-way backhauls, HIP points etc etc and more often than not wind up constructing fares manually or by sector to save the client money and check Sabre for errors.
Take the likes of a Grace L Ferguson Travel and Storm Shutters inc, trading away happily for 10 years in a shopping centre and shock-horror - a Fright Centre moves in next door complete with more spotty Hermans behind the counter with absolutely no knowledge of fares and ticketing (all done in Brisvegas). Grace L and co have to reduce overheads to handle the discounting, so as seniors depart, retire, fall off perch or whatever they replace them with a junior to stay afloat. So now you have 2 agents that know nothing at the front end. Yes we do have a Fright Centre in town and they are no threat to us but are making life hard for the agencies looking for the VFR traffic. They are not overly clever either as every time someone has come in here after going there first, our standard formula has undercut them without seeing what we had to beat first. Marketing - that is all it is.
You are right in saying the marginal agencies without a niche are likely to go under. Maybe they are past use-by and would have anyway.
As for domestic travel - here is an interesting one! Did you realise booking with your credit card online with QF and JQ was not secure? DJ is, but the others - no!! I know of instances where credit card numbers have been collected and used fraudulently.
The way we are set up, we can sell web fares on the Sabre system, with a fee per sector in the future (now $10.00 per leg on JQ) and still make a living. Corporates will happily pay for us to quickly compare the 3 incumbents and give them the cheapest deal without them having to wade through 3 booking engines themselves and taking ages to do it.
It is going to be an interesting couple of years, but if one thing is constant in any part of the travel industry it is most certainly change.
Best regards
EWL
Oh - and Virgin pay agents who have been actively selling them 5% on a monthly basis + 2% for reaching target amount +1% overide for a target percentage increase. This has weeded out the non producers and gives them an incentive to produce, and the producers an incentive to increase.
EWL
Moderate, Modest & Mild.
Might be something to do with the fact you've never actually worked in a de-regulated, free market industry.
I think your comment
airlines are some sort of benevelent society
Back to you, Johnny
Alan Joyce....introduced 'equally revolutionary' concepts to Australian aviation
Besides that, J* has still not proven itself - personally I have my doubts that in its present form, the Oz public will embrace J*, as they have Virgin Blue.
Thanks for your info, EWL - nice to see you in "full flight" again!!
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"Similar changes have already been made overseas, with travel agents adjusting to new remuneration models, including the collection of service fees."
Several foreign airlines servicing Australia, including Singapore Airlines, are expected to reconsider their own commission structures after Qantas makes the first move.
hmmmmmmmmm
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F bo
Interesting quotes Ultralights.
Also interesting is the observation that United that about 3 years ago United dropped commission ex Australia to 7%. 18 months later - back to 9% because we sold the code shares or another airline. American and UA abolished commission for all ex US bookings for Australian agents. Again - we are selling the code shares and the supportive airlines.
Singair do not allow full published fares available outside the country of sale to be sold in another country. We sell the other airline. The local SQ office is well aware of this and not happy as they are losing sales of full published fares.
Southwest (the alleged doyan of the low cost carrier) is now looking at agent remunerration after years of going it alone, so are Greasy Jet and Ryanair.
The ox is slow, but the earth is patient. It is a long road without a turning and a further mix of metaphors would cover this.
If we are clever enough, we will simply restructure (I did so today, and will be imposing fees we should have been charging for years) and continue to deliver the best service we or anybody else can.
Small delay in typing this in. Call from a client. Changed a booking for the 6th time. Change fee went up $22.00 to $55.00. No arguement - no shock. For the first time, I was paid for after hours processing. Anyone find this unfair?
Best
EWL
Those who have been living on the razors edge will simply feel the effects of gravity.
Rich Fine Green mate -
Most of our traffic never touches Tassie, so no would be the answer. The intro of JQ has had a very negative impact for most Tasmanian agents due to client dissatisfaction but has had a bizzare side effect here in DPO. The punters ex the North Island travelling for business ar mounting the bugsmasher to DPO rather than LST to A/: earn points B:/ Not be hearded onboard like a Jersey cow C:/ Have a beer for free after 3PM and D/: Not require physio after an hour in a seat you do not sit in but actually have to put on.
Mrs Loco works for Autorent Hertz and can attest to the number of new faces in and outbound and the reps that are hitting DPO instead of LST to do their sales runs.
J class had been missing for a good while ex TAS from the time the B717s were introduced but now one flight a day ex LST and a few ex HBA carry J at business traffic hours.
It is a bloody mess though and DJ is VERY popular - simply from the seat allocation side of things. I mean - how hard is it?
My main concern is my corporates on the Gold Coast - they are in despair and driving to Brisbane. 2 flights a day to SYD with normal service/cabins.
I am still trying to come to terms with Australian domestic aviation being shot back 45 years on some Irish master plan that doesnt even fit this country.
Aaaaaaaaaaaaah - progress!
Best
EWL
Also interesting is the observation that United that about 3 years ago United dropped commission ex Australia to 7%. 18 months later - back to 9% because we sold the code shares or another airline. American and UA abolished commission for all ex US bookings for Australian agents. Again - we are selling the code shares and the supportive airlines.
Singair do not allow full published fares available outside the country of sale to be sold in another country. We sell the other airline. The local SQ office is well aware of this and not happy as they are losing sales of full published fares.
Southwest (the alleged doyan of the low cost carrier) is now looking at agent remunerration after years of going it alone, so are Greasy Jet and Ryanair.
The ox is slow, but the earth is patient. It is a long road without a turning and a further mix of metaphors would cover this.
If we are clever enough, we will simply restructure (I did so today, and will be imposing fees we should have been charging for years) and continue to deliver the best service we or anybody else can.
Small delay in typing this in. Call from a client. Changed a booking for the 6th time. Change fee went up $22.00 to $55.00. No arguement - no shock. For the first time, I was paid for after hours processing. Anyone find this unfair?
Best
EWL
Those who have been living on the razors edge will simply feel the effects of gravity.
Rich Fine Green mate -
Most of our traffic never touches Tassie, so no would be the answer. The intro of JQ has had a very negative impact for most Tasmanian agents due to client dissatisfaction but has had a bizzare side effect here in DPO. The punters ex the North Island travelling for business ar mounting the bugsmasher to DPO rather than LST to A/: earn points B:/ Not be hearded onboard like a Jersey cow C:/ Have a beer for free after 3PM and D/: Not require physio after an hour in a seat you do not sit in but actually have to put on.
Mrs Loco works for Autorent Hertz and can attest to the number of new faces in and outbound and the reps that are hitting DPO instead of LST to do their sales runs.
J class had been missing for a good while ex TAS from the time the B717s were introduced but now one flight a day ex LST and a few ex HBA carry J at business traffic hours.
It is a bloody mess though and DJ is VERY popular - simply from the seat allocation side of things. I mean - how hard is it?
My main concern is my corporates on the Gold Coast - they are in despair and driving to Brisbane. 2 flights a day to SYD with normal service/cabins.
I am still trying to come to terms with Australian domestic aviation being shot back 45 years on some Irish master plan that doesnt even fit this country.
Aaaaaaaaaaaaah - progress!
Best
EWL
Join Date: May 2004
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Don't we all shop at Coles and Woolies these days?
Don't we all book through Flight Centre, Harvey World Travel or via the Internet?
We're part of a global village, and you move with the times or get left behind!
Don't like it any more than you, but it's the way of the world.
Move with the times or get left behind... it's called survival...and no matter how much posters on this thread may support the likes of East West Loco and others like him, and I do too, when the chips are down, we'll drop him like hot cakes! Sad but true!
Just like the cretins will vote in Biffo, 'cause he's gonna put money in their pockets and that's all we care about these days. Pathetic isn't it?
Don't we all book through Flight Centre, Harvey World Travel or via the Internet?
We're part of a global village, and you move with the times or get left behind!
Don't like it any more than you, but it's the way of the world.
Move with the times or get left behind... it's called survival...and no matter how much posters on this thread may support the likes of East West Loco and others like him, and I do too, when the chips are down, we'll drop him like hot cakes! Sad but true!
Just like the cretins will vote in Biffo, 'cause he's gonna put money in their pockets and that's all we care about these days. Pathetic isn't it?
Join Date: Apr 2000
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Obie - If my ladies and I are good enough, and I really do think we are, then this will prove to be a positive.
It will weed out the marginal operations and leave the good ones.
It will be merely anuisance, and yet more change. Unfortunately mainly for the sake of change when you take a long hard look at things.
Best regards
EWL
It will weed out the marginal operations and leave the good ones.
It will be merely anuisance, and yet more change. Unfortunately mainly for the sake of change when you take a long hard look at things.
Best regards
EWL
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Thurs "The Australian"
Fee cuts clip $100 million off travel agents' wings
Andrew Fraser
September 09, 2004
INVESTORS slashed about $100 million from the value of listed travel agents Flight Centre and Harvey World Travel after Qantas announced it would be paying less base commission.
Under the new structure, base commissions paid by Qantas for the Australian domestic market would drop from 5 per cent to 1 per cent from the middle of next year.
There would be a similar drop on base commissions in the New Zealand domestic market and travel between the two countries from the start of next year. Also from the start of next year, base commissions on international flights would drop from 9 per cent to 7 per cent.
The two listed travel agencies on the Australian Stock Exchange – Brisbane-based Flight Centre and Sydney-based Harvey World Travel – saw their share price drop about 5 per cent after the Qantas announcement.
Flight Centre opened yesterday at $19.22 and dropped to as low as $18.11 before recovering to close at $18.20, a drop of 5.3 per cent during the day.
Harvey World Travel opened yesterday at $1.70 and slipped to $1.59 before closing at $1.61, a drop of 5.29 per cent during the day.
Flight Centre managing director Graham Turner said that Qantas accounted for about 15 per cent of Flight Centre's total transactions, but the loss of base commissions could mean more money in other areas.
"Base commissions are pretty well out in international travel anyway – about 80 per cent of bookings for international travel don't involve base commissions," he said.
"They're only one part of the overall remuneration. We're more interested in the level of overall remuneration.
"While there's a cut in the base commission rate, there are other areas where we can make up more money in incentive payments."
But Mr Turner said that, if there was a drop in the overall level of payments, then "commercial reality really means that Flight Centre would move a significant proportion of its business on to other carriers which offer greater rewards".
Qantas head of sales and distribution Rob Gurney said the changes largely brought Qantas into line with its international competitors, and the airline would continue to use travel agents.
"We are confident that we will be able to work with the industry to develop a suitable model," he said.
Australian Federation of Travel Agents chief executive Mike Hatton said he did not expect job losses or businesses to close down because of the move.
============================================
Fee cuts clip $100 million off travel agents' wings
Andrew Fraser
September 09, 2004
INVESTORS slashed about $100 million from the value of listed travel agents Flight Centre and Harvey World Travel after Qantas announced it would be paying less base commission.
Under the new structure, base commissions paid by Qantas for the Australian domestic market would drop from 5 per cent to 1 per cent from the middle of next year.
There would be a similar drop on base commissions in the New Zealand domestic market and travel between the two countries from the start of next year. Also from the start of next year, base commissions on international flights would drop from 9 per cent to 7 per cent.
The two listed travel agencies on the Australian Stock Exchange – Brisbane-based Flight Centre and Sydney-based Harvey World Travel – saw their share price drop about 5 per cent after the Qantas announcement.
Flight Centre opened yesterday at $19.22 and dropped to as low as $18.11 before recovering to close at $18.20, a drop of 5.3 per cent during the day.
Harvey World Travel opened yesterday at $1.70 and slipped to $1.59 before closing at $1.61, a drop of 5.29 per cent during the day.
Flight Centre managing director Graham Turner said that Qantas accounted for about 15 per cent of Flight Centre's total transactions, but the loss of base commissions could mean more money in other areas.
"Base commissions are pretty well out in international travel anyway – about 80 per cent of bookings for international travel don't involve base commissions," he said.
"They're only one part of the overall remuneration. We're more interested in the level of overall remuneration.
"While there's a cut in the base commission rate, there are other areas where we can make up more money in incentive payments."
But Mr Turner said that, if there was a drop in the overall level of payments, then "commercial reality really means that Flight Centre would move a significant proportion of its business on to other carriers which offer greater rewards".
Qantas head of sales and distribution Rob Gurney said the changes largely brought Qantas into line with its international competitors, and the airline would continue to use travel agents.
"We are confident that we will be able to work with the industry to develop a suitable model," he said.
Australian Federation of Travel Agents chief executive Mike Hatton said he did not expect job losses or businesses to close down because of the move.
============================================
adapting to the new structures is fine if you have a large population base from which to draw. we don't. we have ther sole agency in a small country town with a daily QF and CC service.
50% of pax are qld gov and book through their own agency.
the rest are through us or internet. we field a lot calls from people who stuff their internet bookings. of course, we can do nothing about those problems other than to tell them that if they had booked through us we could have done it for the same price and had access to the PNR's for changes. we would sell at least 1/2 $mil
of tickets for these services per year. chewing our commisiion rates down, means we would have to reconsider the viability of having a shop front. luckily for us, we have the handling contract for aircraft turnarounds. agencies in other small towns will not be so lucky.
i like the idea of a weeks booycott. probably won't happen though.
50% of pax are qld gov and book through their own agency.
the rest are through us or internet. we field a lot calls from people who stuff their internet bookings. of course, we can do nothing about those problems other than to tell them that if they had booked through us we could have done it for the same price and had access to the PNR's for changes. we would sell at least 1/2 $mil
of tickets for these services per year. chewing our commisiion rates down, means we would have to reconsider the viability of having a shop front. luckily for us, we have the handling contract for aircraft turnarounds. agencies in other small towns will not be so lucky.
i like the idea of a weeks booycott. probably won't happen though.