BRITISH Airways considered cutting commission to below its current basic rate of 7% to bring it into line with other European carriers, new director of sales Dale Moss has revealed.
Moss confirmed BA is still under pressure to cut costs by changing commission payments to agents.
Moss said: “My worry is that investment communities may consider we have not taken costs down enough.”
He said the airline would continue to reduce costs where appropriate, but felt agent payments were currently at the right level.
However, Moss added the reduction in commission and the scrapping of the Performance Reward Scheme was not just about cost-cutting. It was also to do with a more realistic distribution system for its entire ú6.6bn worldwide sales operation.
“Standard commission is something that exasperates me,” he said. “The cost of selling tickets has gone down, but compensation for agents has gone up as fares have gone up.”
Moss explained PRS had to be scrapped because it had not helped BA grow its business and denied agents’ claims it was just a temporary measure before a complete cut in commission to 7% from 9%.
Moss said agents which feared they would be left with reduced commissions could qualify for extra payments under special agreements if they increased sales in the future.
He refused to reveal what top performers would be paid after PRS goes in April. “There will be different relationships with each agent as we have the technology to make separate arrangements,” said Moss.
BA sales teams are currently visiting their best clients to draw up post-PRS contracts with agents.