BRITISH Airways has increased agents’ basic commission to 10% in a dramatic policy U-turn.
From September 1, around 1,000 UKagents which do not have corporate deals with BA will see payments rise from 7% to 10%.
ABTApresident Steven Freudmann said it was a fantastic result for agents.
“We are absolutely delighted,” he said. “It is great news that agents will be paid a fair level of commission.
“This will go a long way to help to rebuild bridges between the agency community and BA.”
The new payment programme, called the Interim Agency Bonus scheme, will cost BAmillions of pounds at a time when the airline is already under pressure to reduce costs. But BA had been forced to implement new deals after the European Commission ruled its previous agency agreements were unfair. It was given just one month to write new contracts (Travel Weekly July 19).
BAgeneral manager commercial development Simon Parks-Smith said:”We had many meetings with agents and in our opinion this was the most suitable option.”
Under the bonus scheme, all agents receive a basic 7% payment on published fares and agents without corporate deals will be paid an additional 3% bonus. Agents with corporate deals with BA will get 7% commission plus a 1% additional bonus.
The payments are dependent on agents undertaking training on BA products. Agents can also earn extra bonuses if they can prove they can add value to BA’s service, for example by demonstrating efficient distribution methods.
BAis also putting in place a service level agreement for agents on the 8% commission payment, where they will receive an extra bonus when they supply BA with monthly data about clients’ travel.
For consolidators, BA will negotiate flat-rate bonus payments on net fares which will vary according to the journey.
The Interim Agency Bonus is a temporary measure which will run for the next six months, but it is thought unlikely that BA will cut its commission again in April 2000 when new contracts are drawn up.
Freudmann said:”I hope this change of heart in terms of levels of commission will not be followed by a further change of heart in April. I can’t imagine that BAwill want to face a further crisis.”
But not everyone was satisfied. Guild of Business Travel Agents chairman Don Lunn said:”It’s a step in the right direction but I do not think they have gone far enough.”
ABTA Aviation Committee chairman Sandy McPherson urged other airlines to follow BA’s lead and increase commission.