Freedom Flights will “eventually” adopt net pricing as the model becomes widespread in the industry.
The carrier cut commissions for the first time in seven years in April from an average of 14% to a blanket 10%. Managing director Paul Moss admitted net prices would be introduced but would not be drawn on a date.
“We will continue to watch the market. Ultimately we will go to net,” he told delegates at an ABTA Travel Convention breakout session on net pricing.
Low Cost Group chief executive Paul Evans claimed more travel businesses are likely to adopt net pricing models but travel agents would struggle to change. Evans said: “Asset holders like cruiselines, hotels and airlines are going to take more control of their pricing models.
“Net pricing is accelerating but the mark up systems are not being used yet by high street agents. They are too comfortable in their fixed commission mode. I don’t think the booking fee model will necessarily replace that margin and I’m not convinced the customer will perceive it as value for money.”
Although airlines have embraced net fares, tour operators have yet to use net prices and cruiselines are in no hurry, he added. Evans said owning stock will become more relevant under the net pricing model. “Net pricing is about control of your cost of sale,” he said.