Travel agents to vent wrath over commission cuts by steering customers from Qantas

Qantas has cut its commissions and now travel agencies could take revenge by steering customers towards airlines such as Qatar, Delta and Air Canada that haven’t.

From Thursday, travel agents will start steering clients towards the few airlines – including Qatar, Delta and Air Canada – that have not dropped commissions.

Other airlines, such as Qantas, could fare badly after slashing commissions to travel agents on international fares from 5 per cent to 1 per cent, excluding trans-­Tasman fares.

Qantas said it was the first time it had adjusted its commission on international fares in 15 years.

It flagged the cut from July 1 as part of the airline’s Covid-19 pandemic recovery plan, adding that the changes formed part of the work under way across Qantas to reduce costs by $1bn each year.

Sydney-based Goldman Travel has introduced fees to counter the income loss, charging customers $275 to produce itineraries for one to three destinations and a $400 fee for

itineraries of more than three destinations.

Qantas Group chief executive Alan Joyce. The airline insists it hasn’t adjusted its commission on international travel for 15 years.

The fees are charged upfront before planning commences and are charged whether or not the travel occurs.

“Not one client has baulked at these fees; our leisure clients are absolutely prepared to pay this,” said David Goldman, the company’s managing director.

“Essentially airlines want the travel agency network to generate sales for them but they don’t want to remunerate us for doing so.

“We will absolutely be putting in the mix of airlines we offer clients those that support us.”

Helloworld chief Andrew Burnes says agencies are likely to direct customers to higher commission-paying carriers.

Helloworld chief executive Andrew Burnes – who runs just over 2000 agencies and brokers in Australia and New Zealand – said the changes could hurt airlines.

“I think agents will steer their customers towards products on which they can make a reasonable margin … that has worked in markets since the markets were first established thousands of years ago,” said Mr Burnes.

But Qantas is not the only airline to cut commission to travel agents from 5 to 1 per cent. Other carriers to take this route include British Airways, Singapore Airlines and Thai Airways. The Chinese carriers are yet to return to Australian skies.

Mr Goldman said on Wednesday: “Our clients may prefer a particular airline — we also support that — and we will put every single combination of airline to the client; we will suggest options and will continue to put those options in front of the client.

“We are a platinum agent with Qantas, one of only 100 in Australia, where we get waivers and favours for clients and we will continue to wear that badge, even though it’s a more difficult landscape for us in this new airline ­arrangement.”