Qantas commission cut will help other airlines, say travel agents

Travel agents reckon they will push clients towards other airlines after Qantas’ decision to cut commissions on international fares.

Travel agents say they will start pushing holidaymakers away from Qantas. Picture: Gaye Gerard

Travel agents reckon they will push clients towards other airlines, following Qantas’s decision to cut commissions on international fares from the middle of 2022.

The national carrier said it would slash front-end commissions paid to travel agents on international tickets from 5 per cent to 1 per cent in a move long expected by the travel industry.

“Agents will react accordingly,” said several senior travel agents contacted by The Australian, suggesting they would steer clients towards other international airlines over Qantas.

“I am sure agents will send clients to other airlines … it’s a competitive market.

“It is very disappointing behaviour at a time when agents are really doing it tough. They are going to do it tougher because they are not going to be remunerated for selling tickets,” a source said.

Qantas’s announcement sent travel stocks such as Webjet, Corporate Travel Managment and Flight Centre into a tailspin during the session on Thursday.

Australian Federation of Travel Agents expressed its disappointment in Qantas.

In a statement, AFTA said it had 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 was unlikely to normalise before the middle of 2022 at the earliest.

Corporate Travel Management CEO Jamie Pherous. Picture: Liam Kidston.

Flight Centre managing director Graham Turner. Picture: Dan Peled

AFTA said it had negotiated to get Qantas to provide a one-year lead-in to the reduced commission structure.

“AFTA, on behalf of our members and the consumers we support, is very disappointed,” according to the AFTA board.

“It’s true there has been a gradual global transition to reduce billing and settlement plan (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.”

However, Flight Centre co-founder and managing director Graham Turner said Qantas’s decision was almost irrelevant given it doesn’t happen until next year.

“We are really not worried about this.”

Asked if Flight Centre agents would steer clients to other airlines, Mr Turner said: “We have to be able to make a profit; it’s the way we work.

“We have known this has been coming for some time,” he said.

Corporate Travel Management founder Jamie Pherous said Qantas’s decision would have no material affect on his business.

“It impacts leisure travel businesses, not corporate travel,” he said.

CTM stocks fell 4.6 per cent while Flight Centre was off 4.7 per cent during early trading.

Qantas said it had not changed its commission structure on international fares in 15 years. “Like all airlines, Qantas is working to recover from the biggest crisis our industry has ever faced,” said Qantas executive manager Igor Kwiatkowski, adding that given the billions of dollars of extra debt and lost revenue due to COVID, “these cost reductions are central to our recovery plan”.