Another round of commission cuts

Commission made on flight-only sales is the latest agent earner to be squeezed following a fresh round of cuts in the trade.

Freedom Flights and Thomas Cook announced plans this week to pay agents a blanket 10% on flight-only sales from early next month. The operators claim fierce competition from rivals, who already pay 10% or less to agents, has prompted the decision.

Rival Avro, which pays agents 13%-14% commission, is also reviewing its payment structure, managing director Michael Vinales revealed.

Libra Holidays ­ which has enjoyed a 50% increase in flight-only sales this winter ­ admitted it too could be forced to follow suit.

Sales and marketing director Paul Riches said: “If the other players move to 10% or 5% commission, then we will have to look at doing something similar.”

Neither Thomson nor First Choice are reviewing flight-only commission.

Thomson already pays 10% and the industry norm is currently 10% among other major tour operators.

Freedom Flights will cut agents’ commission to 10% from an average of 14% from April 3. Rocketing fuel bills ­ up 18% year on year ­ are to blame, said managing director Paul Moss.

“We are getting more money per seat year on year but it has not kept up with the rise in costs to operate our aircraft,” Moss said.

“In an ideal world, we would put up prices and keep commission high, but we are operating in a competitive market against the likes of Ryanair and EasyJet, and it is not possible.”

Freedom Flights has not ruled out rewarding high-performing agents with extra perks, but is waiting to see how much sales drop off before agreeing any deals.

In 2005, 83% of the operator’s 750,000 seats sold were booked by travel agents.

Moss is meeting Triton Travel Group director John McEwan on Monday to discuss the implications of the cuts and Triton’s future support.

McEwan said: “I do understand the pressure of fuel and the need to remain competitive, but we are not happy.”

Thomas Cook has told agents it will reduce commission to 10% from April 7.

Agents will have the option of selling net fares via Flythomascook.com.

Midconsort Travel chief executive Charles Eftichiou revealed Thomas Cook currently paid preferred agents at least 15% for flight-only bookings.

He expects Freedom Flights’ sales to drop because of the commission cut.

“I don’t understand why this industry insists on having too much capacity and then reduces prices. All these cuts do is make the sellers and the producers of travel suffer,” Eftichiou said.