First Choice under fire on commission

MIDCONSORT has threatened to derack First Choice after the operator enquired about slashing charter commissions.

Chief executive Charles Eftichiou warned of a “consortia-wide” boycott of First Choice if it pushes through plans to cut seat-only payments. Operators currently pay up to 15% for flight-only.

Under the proposal, only 20% of Midconsort’s members would retain the existing levels of commission because of their high volume of First Choice product.

Eftichiou refused to reveal the level of sale needed to retain existing commission levels. “We are prepared to derack First Choice,” he said. “We can’t have operators using agents as free distribution for their phone number.”

A First Choice spokesperson said: “We have had a discussion with Midconsort but we have not had a response.” Meanwhile, Holidaybrokers founder Steve Endacott claimed major operators are considering cutting commission on late holidays sold via third-party agents.

“Products suitable for the web have quickly seen commission eroded,” he said. “Once operators have reduced commissions on charter seat-only sales the next product will be late availability. It’s the one thing operators lose money on.”

Advantage head of commercial Julia Lo Bue Said said no approaches by the big four had been made on commission. “Obviously we are opposed to it,” she said.

Cosmos commercial director Stuart Jackson added: “If you are getting diminishing returns you have to look at the business costs on both sides of the fence.”

TUI UK commercial director Derek Jones denied the operator had any plans to cut commission.