BA commission goes to zero

British Airways is to reduce commission payable to UK travel agents on bookings from one percent to zero, leaving agents to add their own service fees on top of ticket prices.

Announcing the change, which will become effective on 1 May, Ian Heywood, British Airways’ head of consumer and agency sales, said: “The changes announced today recognise that the role of the travel agent has changed during the past few years. Services offered by agents will continue to be driven by customer needs with agents charging for the services, which their customers require.

“We need to continue to transform our business to remain competitive and to reflect the changing needs of the market and our customers. This is part of a global trend. In many parts of the world, carriers no longer pay commission to travel agents.”

For those who choose to book directly with British Airways, the lowest advertised price will be available on ba.com. This is the same fare available to agents via their global distribution systems, the airline states.

Mr Heywood continued: “The arrangements will provide agents with flexibility to determine the price they charge to their customers for their ticket sales, giving them more control over their income and enabling them to manage their own business more effectively.”

Travel Counsellors’ head of business travel Kevin Heath played down the decision: “This really isn’t such a big issue for us as the amount is negligible and we are already all charging fees. Fortunately for us, this move by the airlines in general has not affected our sales and we see no reason why this decision by British Airways, which we have all been expecting, should be any different.”

Norman Gage, Advantage Travel Centres’ director of business travel appeared to concur with this view: “It is inevitable and we had been anticipating this announcement. Advantage Business Travel members have already engineered their businesses to take account of these forecast changes.”

An ABTA statement reads: “ABTA has been in dialogue with British Airways since it learned of the new proposals to reduce remuneration to agents to 0%. The move to net fares is not entirely unexpected, as other European carriers have already made this change in their home markets in the past couple of years. ABTA has expressed its concern that the original proposal did not comply with the requirements of the IATA Passenger Sales Agency Agreement. We acknowledge that the fee for off-line short-haul fares will be extended to long-haul tickets.

The principle that agents are entitled to remuneration under that Agreement, albeit indirectly, must be recognised by BA. ABTA is waiting to learn what the on-line fee will be on BA.com, at which stage we will consider whether further action can be taken. It is important that there is a meaningful margin in every BA distribution channel between the net fare offered to travel agents and the fare available to the public, who are buying directly from BA. We will provide further information as it becomes available.”