AIR France is expected to cut commissions for UK agents from next year following a revamp of payments in its domestic market.
The airline revealed it is studying British Airways’ controversial agent payment plan as it prepares the changes.
Senior vice-president international commercial affairs Patrick Alexandre said: “Our agreement with French agents runs until 2001. We will then look at a reshuffling of commission and are looking at the BA option.”
Alexandre said the new structure would be drawn up in consultation with agents and their representatives.
Currently, the airline pays French agents a 7% basic rate, but Alexandre admitted the carrier has already started to give larger agencies preferential deals in return for improved sales.
In the UK, Air France continues to pay 9% despite coming under pressure to follow other large carriers like Lufthansa with a cut to 7%.
Alexandre revealed Air France wanted to adopt a system which rewards agents for their quality of sales rather than just growth. Corporate clients were also key, he added.
He said: “We will look to pay differently. In effect Air France will pay less but better, more efficiently. The main battle for us is with our distribution network.”
The move to reduce distribution costs follows a three-point plan to reduce expenses. The plan states that Air France will aggressively develop all direct sales opportunities; integrate electronic commerce more efficiently into the distribution network; and improve the productivity of travel agent sales.
In addition, the airline also has a goal to cut costs in overheads and purchasing.
The drive to cut costs comes as the carrier strives to be more efficient as its global alliance with Delta Air Lines takes off. Last year, Air France chose London for a new call centre to enhance its direct-sell business.
n Delta senior vice-president network management Mark Drusch said his airline was still committed to trying for Heathrow access despite the latest breakdown in UK-US bilateral talks.
The carrier has been expected to gain limited Heathrow access following last month’s discussions but alleged intervention from BA killed the talks. Delta’s service is confined to Gatwick under current rules.