Open letter to travel agents
You will have seen press reports of the EuropeanCommission’s decision to fine British Airways, finding it guilty of abusing itsdominant position as a buyer of air travel agency services from the UKtravel trade.
There is no reason why this decision should mean the travel trade should receive any less income from future agreements with BA or any other airline. What the decision means is that, in future, BA should compete fairly on a route-by-route basis and that the amount of commission paid could and should be transparent to consumers.
There are any number of perfectly legal methods for BA to pay commission – for instance, it could do a lot worse than follow Virgin’scurrent incentive scheme which contains basic commission levels that are higher than BA’s and which at the moment pay a total of 10%.
Many in the trade have told me they have felt uncomfortable about the effect BA’s schemes have had, as they were forced to meet BA’s sales targets. It should never have put the trade in this position without warning it of the dangers, of which BA has been aware of for some years.
The EC’s decision willprevent BA’s attempt to drive competitors out of business. Had BA been allowed to continue to abuse our industry, it would inevitably have been free to set commission levels at its own choosing. It is my firm belief that the EC’s decision will create a new industry landscape which is better for travellers and the travel trade.
Richard Branson
Chairman
Virgin Atlantic Airways