‘Low-cost carriers pose big threat to commission’

‘Low-cost carriers pose big threat to commission’

Corporate travel retailers face an uncertain future. Louise Longman reports from the 2000 Independent Business Travel Agents’ Conference at Gatwick

BUSINESS travel agents have lost out on £25 million worth of commission from low-cost airlines over the past year, Deloitte and Touche head of aviation consulting Mark Darby told retailers.

Speaking at the 2000 Independent Business Travel Agents’ Conference, Darby urged agents to start charging fees or generating revenue from non-airline sales. He warned low-cost carriers will not disappear.

“Sign up to agent schemes, such as the one offered by Go, or start charging fees, but ignore low-cost airlines at your peril, they are here to stay,” he said.

Darby added low-cost airlines have had a huge impact on European routes, and although some corporate travellers have started using the no-frills carriers, clients booking more complex itineraries will always go to an agent for help.

“The business traveller is used to low-cost airlines. They are happy for their companies to pay for business-class tickets but they are first in the queue when it comes to cheaper tickets. Customers will come to you for the more complex itineraries. You should concentrate on these.”

A straw poll during the conference revealed that 98% of the audience booked tickets on low-cost airlines. But only 56% of the audience admitted they were increasing sales through non-airline products, such as car hire and hotels, to compensate for the shrinking revenues from low-costs airlines.

International Air Transport Association distribution services project manager Mike Carrivick said: “Fees of some nature have to come on board to replace lost revenue. There is a lot of non-commissionable products you can sell for a fee, why not try it?”

Darby: told agents not to ignore low-cost airlines because they are here to stay