BRITISH Airways’ move to 1% commission is likely to
open a floodgate of copycat moves by rival airlines.
BMI is favourite to follow the flag carrier, having
already indicated distribution costs need to come down as part of its ‘Blue
Sky’ cost reduction project.
Chief executive Austin Reid has said
agents need to understand the commercial environment has changed since the
trade received 9% commission. A BMI spokesman said: “We have not made any
commitment to change since we reduced commission from 7% to 4%.”
However, a source close to the company said: “It’s not
an anti-agent move, it makes commercial sense on BA’s behalf. The operating
environment has changed and costs are too high, so it seems a reasonable
approach to take and many others are likely to follow.”
Currently, only Flybe and Logan Air offer agents 1%
and BA’s Oneworld partner Aer Lingus is going from 4% to 1% today. Other
Oneworld partners, including Qantas, Cathay, Iberia and American Airlines, have
all denied they will change commission on an alliance-wide initiative, but have
refused to commit to their current 4% rates.
Meanwhile, analysts said BA’s move signals the
inevitable decline of agents. Independent aviation analyst Chris Tarry said BA
had made significant changes in developing its on-line strategy and its ability
to compete with no-frills carriers.
Dan Solon, aviation expert with specialists Avmark
International, said distribution channels were evolving to reduce human
contact. “It is difficult to be optimistic about the general travel agent.”