LUFTHANSA has confirmed it will follow British Airways by slashing UK agents’ commission to just 7% from April 1, as exclusively revealed in Travel Weekly.
The move is expected to be copied byLufthansa’s Star Alliance partners SAS, United Airlines, Thai Airways, Air Canada and Varig.
A Lufthansa spokesman said: “This is part of our cost management to drive down distribution costs. Logic would dictate that Lufthansa’s partners would move in a co-ordinated fashion.”
He said top agents are being contacted to sign up for special deals under a new scheme called Lufthansa UK Agency Incentive Programme.
Revenue targets will be set for the most productive agents to gain extra payments.
ABTA aviation committee chairman Joe Bourke expressed concern that Lufthansa’s alliance partners would follow the German carrier.
“BA has said there are no agreements between airlines to follow a joint commission policy, but last week Star Alliance carriers introduced one in Switzerland by going from 9% to 7%,” said Bourke.
“Airline alliances are looking to harmonise rates of commission.”
SAS and United said no decision had been made to cut UKcommissions.
Guild of Business Travel Agents chairman Don Lunn said:”This will put more and more agents out of business and polarise the business, leaving the major global players to tell airlines how they will sell them.”
The only UKroutes exempt from the Lufthansa cut are ones operated by codeshare partners, such as British Midland, and the airline’s new Edinburgh-Frankfurt flight which starts on March 28.
However, the airline said commissions on these would also be reduced to 7% in the long-term.
British Midland said its 9% commission rate would stay for the summer, but managing director Austin Reid said he expects payments to change to reflect sales in the future (Travel Weekly January 20).
n Iberia has become the seventh member of Oneworld after British Airways took a 9% stake in the Spanish airline. BA’s ú200m payment for the stake was made in conjunction with fellow Oneworld carrier American Airlines, which took a 1% share in Iberia.
Codesharing and frequent-flyer co-operation will start on UK-Spain routes later this year.