abta to explore legal options

ABTA is to pull back from immediate legal action against British Airways to see if it still has a legitimate case against the flag carrier.

Reacting with a mixture of relief and disappointment to the results of BA’s Future Size and Shape review, ABTA aviation board director Sandy MacPherson stressed he was not “backtracking”, but would now seek legal counsel to see if ABTA could complain to the Office of Fair Trading.

He said: “It’s not all bad and it’s not all good. The trade needs to understand there was a very real prospect of BA cutting out agent commission altogether, or reducing payments to £2.50 across the board. There is no cap at £5 as we feared. This has made us stop and think ‘do we now have a case?’”

ABTA chief executive Ian Reynolds added: “The BA announcement is complex, but we’re not ruling out going to the OFT.”

The biggest damage will be to agents who sell a majority of domestic BA tickets, whose payments have been slashed from £6 to £2.50 per sector.

“There’s no way an agent can survive on £2.50 sector payments,” said MacPherson.

Reynolds said: “It’s now quite clear there is no potential for profit with the new scheme. No-one’s even pretending that £2.50 or £5 is a viable payment for face-to-face service.”

MacPherson urged BA to continue talking to the trade or be prepared for switch-selling.

“About 80% of BA’s sales are from the trade. If agents are forced to add a booking fee on top of BA’s fares then it would only take a small percentage of customers to stop and ask ‘is there an alternative carrier?’

“We have to have an ongoing relationship with the carrier – something it is testing pretty severely at the moment.”