Travel agents have their say!
Thread Starter
Join Date: Aug 1999
Location: Well it's an IRS nowdays, but the AHRS were fun.
Posts: 108
Likes: 0
Received 0 Likes
on
0 Posts
Travel agents have their say!
Travel Agents Threaten Air NZ Boycott
05/06/2002 07:13 AM - Denise McNabb - The Independent
Throughout Asia and the Pacific, travel agents threaten to blacklist Air New Zealand for its decision to scrap the 4% commission paid to New Zealand agents on domestic bookings.
Directors of the Asia Pacific Alliance, representing 15 travel agency associations in the region, condemned the airline after their annual meeting in Singapore on Saturday.
They said they would ask their 16,000 agent members to consider whether they wanted to continue working with Air NZ when it did not pay them for work done on its behalf.
Agents expect Air NZ to extend its zero commission policy to Australian agents and on international bookings.
American airlines such as Delta wiped their commissions on domestic US bookings in March and agents must now charge a fee.
But Atlantic and Pacific Radius boss Neil Tolich said the US situation was different. Each airline had an oligopoly in the state where it had its hub.
Tolich says travel agents provide more than 80% of Air NZ's bookings.
When Air NZ was "down on its knees last September" it begged agents to support the airline, which they did. Now, he says, they feel they have been kicked in the teeth.
Air New Zealand is pushing domestic internet bookings. But, so far, these represent less than 10% of total bookings.
The airline announced last week it was scrapping business class seats and meal services on its domestic routes as part of wider cost-cutting measures after Labour weekend.
Separately, it told local travel agents it was wiping their commissions for domestic travel but, surprisingly, not the 5% commission on trans-Tasman fares or 9% for international tickets.
Air NZ said there would be alternative target-based incentive payments but details are not yet being revealed.
At the Singapore meeting the travel association heads, including Travel Agents' Association of New Zealand boss Peter Lowery, condemned Air NZ's actions. They said in no other distribution system in the world could a supplier offer its product for sale without contributing to the cost of the sale.
The Australian Federation of Travel Agents has retaliated by dropping Air New Zealand from its list of major sponsors for next month's annual conference in Brisbane.
Last week, Flight Centre, Australia's biggest seller of Air NZ tickets, said it was preparing to jettison Air NZ if it scrapped commissions for Australian agents. Its boss Graham Turner said Air NZ risked losing $NZ205 million a year from its 100 outlets on both sides of the Tasman to save $5 million in commissions. He has since had discussions with Air NZ about future rates of remuneration.
Tolich said there was confusion in the market because of talk about net fares and zero-based fares. With net or wholesale fares, customers realised there would be a mark-up to cover the cost of providing the ticket and service, he said.
"But the perception with zero-based fares is that the commission had been cut because the airline did not need the agent anymore, therefore, why should there be any mark-up? But what it does is pare it back to a net fare."
05/06/2002 07:13 AM - Denise McNabb - The Independent
Throughout Asia and the Pacific, travel agents threaten to blacklist Air New Zealand for its decision to scrap the 4% commission paid to New Zealand agents on domestic bookings.
Directors of the Asia Pacific Alliance, representing 15 travel agency associations in the region, condemned the airline after their annual meeting in Singapore on Saturday.
They said they would ask their 16,000 agent members to consider whether they wanted to continue working with Air NZ when it did not pay them for work done on its behalf.
Agents expect Air NZ to extend its zero commission policy to Australian agents and on international bookings.
American airlines such as Delta wiped their commissions on domestic US bookings in March and agents must now charge a fee.
But Atlantic and Pacific Radius boss Neil Tolich said the US situation was different. Each airline had an oligopoly in the state where it had its hub.
Tolich says travel agents provide more than 80% of Air NZ's bookings.
When Air NZ was "down on its knees last September" it begged agents to support the airline, which they did. Now, he says, they feel they have been kicked in the teeth.
Air New Zealand is pushing domestic internet bookings. But, so far, these represent less than 10% of total bookings.
The airline announced last week it was scrapping business class seats and meal services on its domestic routes as part of wider cost-cutting measures after Labour weekend.
Separately, it told local travel agents it was wiping their commissions for domestic travel but, surprisingly, not the 5% commission on trans-Tasman fares or 9% for international tickets.
Air NZ said there would be alternative target-based incentive payments but details are not yet being revealed.
At the Singapore meeting the travel association heads, including Travel Agents' Association of New Zealand boss Peter Lowery, condemned Air NZ's actions. They said in no other distribution system in the world could a supplier offer its product for sale without contributing to the cost of the sale.
The Australian Federation of Travel Agents has retaliated by dropping Air New Zealand from its list of major sponsors for next month's annual conference in Brisbane.
Last week, Flight Centre, Australia's biggest seller of Air NZ tickets, said it was preparing to jettison Air NZ if it scrapped commissions for Australian agents. Its boss Graham Turner said Air NZ risked losing $NZ205 million a year from its 100 outlets on both sides of the Tasman to save $5 million in commissions. He has since had discussions with Air NZ about future rates of remuneration.
Tolich said there was confusion in the market because of talk about net fares and zero-based fares. With net or wholesale fares, customers realised there would be a mark-up to cover the cost of providing the ticket and service, he said.
"But the perception with zero-based fares is that the commission had been cut because the airline did not need the agent anymore, therefore, why should there be any mark-up? But what it does is pare it back to a net fare."
