Travel agents seek to add service fees as airlines cut commissions

Our national carrier has just taken the hammer from the travel agents. Effective July 1, 2022, Qantas has reduced the commission it pays agents on flight tickets. Instead of 5%, the rate is now 1%. Qantas is not alone. Emirates, Air New Zealand, American Airlines and British Airways are all part of the one percent, while Qatar Airways, Delta and Lufthansa all pay 5%.

Qantas reported the move well in advance, but travel agents are furious. Dean Long, CEO of the Federation of Australian Travel Agents, said it was another blow for agents as they struggled to recover from the near total shutdown of their industry. This includes providing unprecedented levels of customer support.

“Travel agents and businesses are increasingly taking on the role of customer support and the challenges created by flight delays, cancellations and travel requirements,” Long said.

“While some airlines like Qatar and Air Canada recognize this additional support by maintaining stable commission levels, other airlines have not. In addition to these gigantic workload increases, many travel professionals have introduced service fees to allow this level of support to continue.

With airline ticket sales revenue in the dip and flight delays, cancellations and complicated rules around COVID-19 requiring more time per customer, a growing number of travel agents are considering service fees as the only way to survive. Some customers may resist and manage their own bookings, and if it’s a flight to the Sunshine Coast for a week of sunshine, that makes perfect sense. Nothing more complicated and you probably need a travel agent.

As Long says, “As almost anyone will tell you who has traveled recently, if and when something goes wrong, without a travel professional, you are on your own. Your travel agent can help you find flight solutions. delayed and cancelled, find the right insurance, and help you navigate the complexities of refunds and credits.”

You have to wonder if this is a smart Qantas game. Ultimately, on a $2,000 fare to Europe or North America, an agent can sell a Qantas ticket and earn $20 commission, or refer the customer to Qatar or Delta and pocket five times more.

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