Travel Agents

“This is another unwelcome blow”: AFTA slams Qantas’ commission cuts

Australia’s peak retail travel body has slammed Qantas’ decision to slash travel agent commissions for international tickets.

The Australian Federation of Travel Agents (AFTA) has expressed its “disappointment” in the national carrier’s decision to cut commissions on international fares from five per cent to one per cent by July 2022.

Qantas made the announcement yesterday during a market update alongside a spate of job cuts and a two-year wage freeze.

Igor Kwiatkowski, Qantas’ executive manager of global sales and distribution, said that maintaining the airline’s current commission structure is no longer viable and that the cuts are central to its recovery plan.

“We know our travel agency partners have also been hit hard by COVID-19. The crisis has driven a lot of permanent change in how airlines do business and that’s clearly going to extend to agents as well,” Kwiatkowski said.

“That’s why we’ve given more than twelve months’ notice and we’ll be working closely with agents as they adapt their own business models and support their recovery.”

Kwiatkowski said there has been a global shift away from traditional commissions to a service-fee model.

“The Australian peak travel industry body has also recently acknowledged this shift and how important it was for agents to evolve and become less reliant on commissions,” he said.

“Agents deserve to be rewarded for the time, knowledge, expertise and research that goes into booking and managing travel and a service fee is a logical way to do that.”

AFTA has made “strong representations” to Qantas on the pressing need to maintain the status quo given travel agents’ primary revenue reliance on international travel and the reality that international travel is unlikely to normalise before mid-2022 at the earliest.

“AFTA on behalf of our members and the consumers we support is very disappointed,” the AFTA board said in a statement.

“It’s true there has been a gradual global transition to reduce BSP payments but that transition happened in a pre-COVID world.

“The reality of COVID and the ongoing paralysis of international travel until at least mid-2022 puts Australia’s travel agents and businesses in a very difficult position.

“While we are grateful that Qantas has provided 1 year’s notice of these changes following strong representations from AFTA, the reality is that the ongoing paralysis of international travel to and from Australia has hit travel agents and businesses extremely hard and this is another unwelcome blow.

“The AFTA board notes the longstanding relationship Qantas has had with travel agents and businesses and we ask Qantas to work closely with us to optimise benefits for agents as we move forward including on QDP.”

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