THE Guild of Business Travel Agents has branded British Airways’ controversial proposals for revamping commissions as “fundamentally flawed” (Travel Weekly November 15).
GBTA chairman Don Lunn said plans to scrap commission or bring in payment capping are not constructive ways of building up the poor relationship between agents and BA.
In a harshly worded three-page response sent to BA’s head of UK and Ireland sales Tiffany Hall and Travel Weekly, Lunn warned of dire consequences for the industry if BA pressed ahead with one of the two options.
He claimed the future existence of the International Air Transport Association would be put in serious doubt if BA followed Singapore Airlines’ model of encouraging service fees to make up for zero commission in its home market.
Lunn said: “If the agencies are no longer paid by the airline, they are no longer agents of the airline in the legal sense. If that is the case they [airlines] give up all control of the agency location that distributes their product, notably by means of the IATA passenger sales agency agreement.”
The agreement sets the rules governing airline ticket sales. He also argued that without IATA rules, ticket interchangeability would be lost.
Lunn also warned that service fees could result in increased ticket prices.
The GBTA told BA that the no commission policy would lead to more business being directed away from the airline. It also said the plan may backfire for BA as agencies will consolidate into global players able to dictate their own terms to airlines.
On the capping proposal, the GBTA said this was also commission scrapping and had proved unworkable in Europe. Previous attempts had been disbanded following switch-selling to airlines without caps.
Lunn argued the only constructive way forward for BA was to keep the Interim Bonus Agreement after its scheduled March 31 2000 termination date.
He said the IBA could be used as a basis to update the distribution process. This, he said, could be used in tandem with results from a Guild study into new payment procedures as well as a current IATA and agent investigation into renumeration processes.
British Airways refused to comment.