Just when you thought it couldn’t get any worse for travel agents whose businesses have been crippled by Covid, Qantas is poised to slash agent commission from next year.
The Aussie flag carrier says since the start of the pandemic it has lost more than A$16 billion (US$12.4 billion) in revenue, with losses from the previous and the current financial years sitting above A$4.7 billion.
Something had to give, said Qantas, and along with more company job losses, wage freezes and voluntary redundancies among international cabin crew, Qantas will reduce agent commission on international ticket sales from five percent to one percent.
It’s not all bad news, though. The cuts will only apply to travel agents based in Australia.
Qantas said the change won’t take effect until July 2022, “giving time for the industry to adapt”.
The airline said travel agents were still an important partner “and Qantas will work with them on broader revenue opportunities, particularly through technology”.
Qantas CEO Alan Joyce added: “We’ve adjusted our expectations for when international borders will start opening based on the government’s new timeline, but our fundamental assumption remains the same – that once the national vaccine rollout is effectively complete, Australia can and should open up.”
Qantas hopes to resume international flights in late December this year.
Unsurprisingly, news of the commission cuts has not been favourably received by travel agents in Australia, with some indicating that they will shift business away from Qantas and direct it to other international airlines.
In a statement, the Australian Federation of Travel Agents said: “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.”
Qantas is not alone in suffering heavy losses during the pandemic. Singapore Airlines has posted a S$4.3 billion (US$3.2 billion) net loss for a year in which passenger traffic sunk 98%.
Unlike Singapore Airlines, however, the Qantas group has had a good year with domestic travel returning to near-normal. The Qantas Group is on track to reach 95% of its pre-Covid domestic capacity for the fourth quarter of FY21.