LONDON -- British Airways is doing away with commissions for agents
in the U.K., replacing the long-established system with set fees
for agent services.
A British Airways spokesman in the U.S. said there are no plans
to do the same in the U.S., where the carrier pays agents 10% on
economy tickets, 5% on business class and 3% for first class and
the Concorde.
The airline said the new system, to take effect Jan. 1, 2001,
"makes it clearer what we pay agents for and what customers pay
agents for directly."
The airline said the "fundamental change" in how it pays agents
in the U.K. is a necessity in a marketplace with low-fare
competition, more e-commerce and consumer demands for more choice,
value and pricing clarity. Currently, the carrier pays U.K. agents
a 7% commission.
Instead, British Airways will pay agents a set amount for "the
basic service of making a booking, issuing travel documents and
collecting the fare." That amount has yet to be determined by the
airline.
Agents can charge their own fees for other services, such as
24-hour help desks and travel advice, the airline added.
"At the moment, the customer pays the travel agent the same
price, whether the customer requires the basic service or a more
complex service," said Tiffany Hall, who is in charge of U.K. and
Ireland sales for the airline. "The new scheme means that the
customer can choose the level of service they require from the
agent and know exactly what they are paying for."
The airline also insisted the new system could help agents and
even give them opportunities to increase their income.
"The current remuneration does not reflect the work that travel
agents are doing for us," Hall said. "Travel agents' work on higher
fares is not substantially greater than work on low fares, but they
can earn 100 times more."
The carrier said it has been working closely with the Guild of
British Travel Agents and quoted its chairman as saying the GBTA
accepts "the basic principles of the new scheme."
Under the outline of the plan, British Airways will pay agents a
booking fee for making the booking and provision of travel
documents.
It also would pay a "money-collection fee" to compensate agents
for collecting the money if they do not use the airline's
card-acceptance agreements.