ABTA is pressing
ahead with plans to report British Airways’ payment cuts to the Office of Fair
Trading – despite admitting it has practically no chance of winning.
Although Newman
Street insists the board unanimously supported legal action against the changes
to Fresh Approach, they have confessed the action just pays lip service to
angry agents.
Privately the
chances of success are thought to have been put at just one in 10.
ABTA president
Stephen Bath said: “Agents are saying, ‘we are not going to blame ABTA if you
lose; we want you to fight for us’.
“The membership
wanted us to run with this and we are going to have to do it – even if the
likelihood of winning is small. We know at best we have a 50/50 chance.”
ABTA has repeatedly
asked for members to submit evidence of how BA’s new £2.50 sector payment will
hurt them. Lawyers originally thought strong first-person evidence from agents
would prove the carrier was abusing its dominant position in the market.
Despite receiving more than 100 responses from the trade, experts now concede
BA’s case is based on sound commercial arguments.
The move to go
ahead with the OFT action has left industry insiders questioning ABTA’s
motives. “They are putting the message out that they will report BA to the OFT,
but the chances of winning are slim,” said one source. “It’s about putting up a
united front for the members.”
ABTA aviation
board director Sandy MacPherson praised the stand. “It was a very emphatic vote
in favour of the action. Everybody wants this,” he said.
The OFT is
expected to take at least six months to rule on the issue, meaning the June 1
cuts, part of the Future Size and Shape review, will be implemented as planned.
ABTA chief
executive Ian Reynolds remained bullish about the trade’s chances of winning.
He said: “If we
had no chance then obviously there would be no point in proceeding, but we have
been told by our legal department that the evidence we have gathered is
strong.”
BA said it was
disappointed by ABTA’s decision and maintained it would have been more
productive for the airline and trade to work together.
A spokeswoman
said: “We are confident the proposed changes to travel agents’ remuneration
comply with competition law.”
Meanwhile, the ABTA board has approved a 4% increase in its overall
budget spend on salaries, promotions, and special merit awards. Two-thirds of
this increase is likely to go on pay rises for the 73-strong Newman Street
staff while the rest will be spent on promotions or special pay awards.