Air fares to rise as agents forced to take pay cut

Air fares to rise as agents forced to take pay cut
9th July 2006

Air fares to rise as agents forced to take pay cut

Author: By HANNAH EDWARDS
Date: 09/07/2006
Words: 386
Source: SHD
          Publication: Sun Herald
Section: News
Page: 20

AIRLINE travellers will be slugged up to $200 in extra charges on tickets by the end of the year as travel agents try to recoup losses caused by airlines cutting their commission rates.

In line with global trends, Qantas has slashed the commission it pays travel agents for selling its international flights from 9 per cent to 5 per cent.

On each sale of a $2000 fare to Europe, the cuts mean a drop in pay for agents from $180 to $100.

Director of Reho Travel in North Sydney Karsten Horne said his agency was already charging fees of about $100 on sales of the average flight to Europe, but he expects this to increase to as much as $200 by the end of the year as airline commission rates fall further.

Mr Horne said that for a Melbourne to Sydney flight agents were already charging a fee of about $33.

As well as being forced to pay extra to cover the agents' lost commission, passengers will continue to fork out for fuel and noise levies, departure tax and security charges.

Most international airlines have reduced their commissions by 50 per cent in the past six months, Mr Horne said.

"We have to recoup that margin.

"I think by the end of the year they [commissions] will just about be gone. In other markets like New Zealand and Singapore there are no commissions. That's why we know it's coming, because it has everywhere else."

Mr Horne said he was confident consumers would understand the reasons for the extra charges.

He said the rise was necessary to balance the business's bottom line.

"We have to charge the fee because we are simply not getting commission from any other source.

"It's the way we are going to survive. We need to make our revenue from somewhere."

The Australian Federation of Travel Agents chief executive Mike Hatton said agents' commissions were being cut as airlines around the world tried to lower costs without increasing air fares.

He said the charge to consumers might be levied under the title of a service or professional fee.

"Some will build it into their fare, some will charge a separate fee," Mr Hatton said. "There will be all sorts of combinations."