RYANAIR has distanced itself from other low-cost airlines over the contentious issue of service fees.
Speaking at the Low-cost Airlines seminar at Business Travel 2000, sales and marketing director Tim Jeans expressed the Irish carrier’s strong opposition to going down the route proposed by rival budget airlines.
“We remain vehemently opposed to transaction fees as they speed up cuts in commission,” said Jeans.
Rivals Buzz and EasyJet openly encourage service fees, while Go offers agents discounts for on-line bookings. All three don’t pay commission, while Ryanair still offers 7.5%.
Jeans claimed Ryanair has no plans for cuts in commission but warned distribution costs were too high.
He claimed that airlines should not target agents with commission cuts to save money but should instead look to reduce reservation costs.
He said the global distribution systems were costing airlines an unfair amount of money.
“Something like $4 a segment is being spent on fees for global distribution systems. Those firms are the villains of the piece,”claimed Jeans.
Buzz head of sales and distribution John McMahon said: “We will not commission agents but they can set fees if they wish.”
He said agents could also take advantage of offering customers add-ons such as the Fast Track check-in at Stansted and lounge access to justify fees.
Go’s head of sales and marketing David Magliano said more than 1,000 agents have signed up for his airline’s offer of discounts. Agents can get £5 and £8 reductions on tickets if they sign up to Go’s Web site.
“We will roll out the promotion overseas this year,” said Magliano.
All carriers represented at the low-cost seminar said they were here to stay and claimed the market for budget travel will treble in the near future.
But they differed on their strategies.
Ryanair said it will follow the policy of serving secondary airports to keep costs down, while Buzz said it benefited from flying into the major airports and using smaller aircraft than other low-cost airlines. Go warned that, although the market will expand, airports must recognise there is a special need for budget airlines with reduced costs.