ABTA tries to calm Fresh Approach fears

ABTA aviation board director Sandy MacPherson has sought to calm agents’ fears following reports that British Airways is considering reducing sector payments on domestic and short haul fares as a way of cutting costs at the airline.

BA is reviewing all aspects of its business, including distribution costs, as part of its Future Size and Shape review. But Mr MacPherson insisted that no decision about agency renumeration had yet been taken by BA.

He told TravelMole: “Nothing specific was mentioned to us and nothing has been decided. All that BA have said to us is that they are reviewing the whole operation and as part of that they will be looking at distribution costs. If as part of this review they decided to play around with Fresh Approach that is something that would meet with displeasure as it was supposed to be about rewarding agents for the work that they do. However I think we are a long, long way from that.”

However BA field sales general manager Ian Heywood told TravelMole that Fresh Approach is under review. He said: “We have got to look at our costs. When we are trying to compete with the low cost carriers our fares include booking payments and CRS fees which makes us look more expensive. As part of the Future Size and Shape project we have got to look at how we compete with the low cost carriers. Agents currently book low cost fares on the internet and add service fees and we don’t see a problem with that.”

For many agents domestic and short haul European tickets are the only part of the Fresh Approach payment scheme which has left them better off, and BA is likely to face an angry backlash if it did consider making changes so soon after the scheme was introduced.

Geoff Currie, managing director of Mike Stuart Travel in St Annes on Sea said: “We have been actively selling against BA for the past 18 months and nothing they would do would surprise me. My aim in life is to put them out of business. Even for Manchester to London we try and sell British Midland even if we get £2 or £3 less than we would with BA’s sector payments.”

Some agents added that if BA did reduce sector payments they would have no alternative but to start charging their clients service fees.

Norseman Travel director Alastair Ruffman said: “BA have cut out everything else under the sun so needless to say I would disagree with any more changes. We do a lot of first and business class for which we only get paid £20 per sector so the higher domestic sector payments counteract that. [If payments were reduced] we would have to do what we are not doing now which is charge booking fees.”

Geoff Dykes, managing partner of Dykes Travel in Manchester said: “At the moment we are certainly better off than we were under the commission structure because we book a lot of domestic flights. At the moment we get £12 for a return domestic fare of £90 which is double what we got before. Around £4 a sector we could probably cope with but any less than that we would have to consider our options. We already charge some fees and at the end of the day I don’t think they can be avoided.”

Fresh Approach was introduced on April 1 after being delayed from its original January launch date. Instead of paying agents 7% commission, BA now pays £6 for discounted domestic and Euro Traveller fares, £11 for full-fare domestic, Euro Traveller, Club Europe and discounted World Traveller fares and £20 per sector for full-fare World Traveller, World Traveller Plus, Club World, First and Concorde flights.