The override investment

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John DaltonIf you are a travel agent or an airline rep working on an override program, this article is for you. The major airlines are working on new domestic programs for 2005. Rumors, leaks from the airlines and wild conjecture have the agency community wondering what changes will be made.

At this time no one knows. One thing is certain: Change is on the way.

I am fortunate to consult with many agencies getting overrides. I get to see the pros and cons of each airlines program. Lets review the programs from the airlines side first.

Here are elements of the programs that legacy airlines should review if they are to expect high performance in the future:

  • Encourage feedback from agencies before releasing new programs. This makes it a joint effort.
  • Train agents how to sell and to swing market share to a particular airline.
  • Turn data around faster, allowing agencies to manage their program. They cant manage bookings that occurred three to five months ago.
  • Provide the expected market share to agencies before the quarter begins. They cant work with a phantom scoreboard.
  • Never make sales calls to a travel agencys corporate account without the agency being present. Trust is the core of a relationship.
  • Pay agencies for all fares booked and not just certain buckets.
  • The current programs have little to do with todays competitive situation. Take the last point, for example. No airline should be thinking of paying only for the higher classes of service and not paying for cheaper tickets.

    High-yield tickets in the domestic marketplace are no longer in abundance. Low-cost carriers are the ones dictating the fares and are well on their way to representing 35% of domestic market share.

    The agency community will have just as hard a time selling cheap seats as they will high-yield tickets. The lower-fare scenario will occur more often and will total more dollars. If agencies are not rewarded, they will sell a low-cost rival airline and the market-share shift will be accelerated in favor of the new guys.

    This is not the place to debate this issue. Airlines should start talking to agencies that have override programs and request their input.

    Carriers cant succeed on their own. If they are to survive, they must work closely with agencies that know how to swing share. It is time to create long-term partnerships with them to restrain the onslaught of low-cost carriers. Its a great investment.

    John Dalton is an industry consultant, trainer and speaker. He can be contacted at (919) 557-3844 or by e-mail at [email protected].

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