The Australian Federation of Travel Agents (AFTA) Board says it is “very disappointed” in a decision taken by Qantas to slash commissions paid to travel advisors for international tickets to a paltry 1%.
Qantas revealed its shock revelation this morning [Thursday, 20 May 2021] in a market update on its financial status going into the second half of FY21.
The Australian flag-carrier said, pending other future lockdowns or significant domestic travel restrictions, it expects an Underlying EBITDA in the range of $400-$450 million for FY21, however at a statutory level before tax, the Group is expecting a loss in excess of $2 billion.
Qantas Group outlined that its “Recovery Program” to trim its annual costs by at least $1 billion by FY23 was on track, with $600 million to be delivered this financial year. Among recent developments and as part of reducing “its cost of sale”, Qantas confirmed it will lower front-end commissions paid to agents for international sectors from 5% to 1%.
“The change won’t take effect until July 2022, giving time for the industry to adapt,” the company said.
“Travel agents remain an important partner and Qantas will work [with] them on broader revenue opportunities, particularly through technology,” Qantas said.
In a statement, AFTA said it has 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 is unlikely to normalise before mid-2022 at the earliest.”
“While these representations have resulted in Qantas providing a one-year lead-in to the reduced commission structure, AFTA and our members are very disappointed and hope that Qantas will work with AFTA to minimise the impact including through optimising agent benefits on QDP [Qantas Distribution Platform].
The AFTA Board continued, “It’s true there has been a gradual global transition to reduce 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.”
“While we are grateful that Qantas has provided one year’s notice of these changes following strong representations from AFTA, the reality is that the ongoing paralysis of international travel to and from Australia has hit travel agents and businesses extremely hard and this is another unwelcome blow.”
The AFTA Board noted the longstanding relationship Qantas has had with travel agents and businesses, saying “we ask Qantas to work closely with us to optimise benefits for agents as we move forward including on QDP.”
Lead image credit: Bilal EL-Daou/Pixabay