Iberia drops to 1%
Iberia is following BA’s lead and dropping commissions to 1%, but the airline says larger agents aren’t complaining.
Iberia manager of international press, Jaime Peres told TravelMole: “We have had long negotiations with travel agents to try to reduce commissions, and now we have decided to follow the move by British Airways.
“This is the driving trend all over the industry and we are doing the same in Spain.
“We need to cut costs particularly because the no-frills carriers are very aggressive in this market, and with the opening of the new airport in Madrid – which will double capacity – more no-frills are going to enter the market and competition will be even tougher. We must reduce distribution costs.”
Mr Peres said he didn’t know what percentage of Iberia’s sales went through agents, but said it was “quite substantial”.
He added: “But, the thing is they [agents] know they cannot live without us and we cannot live without them so it is a matter of understanding each other.
“They must now change how they do business and start charging fees – which many have started doing already. The larger agents aren’t really complaining about the changes, but the small ones are because their unit costs are higher.
“The time of high commissions for agents is over, and it is just another step for the industry.”
The move to 1% commissions comes into effect on 1 January.
See our previous stories:
05-Sept-2003 TravelMole Interview: Tiffany Hall, British Airways
02-Sep-2003GBTA: BA decision will cause consumer confusion
29-Aug-2003 TravelMole Interview: Sandy MacPherson, ABTA
29-Aug-2003 BA to ditch Fresh Approach
12 Dec 2002 ABTA loses case against BA
13 Feb 2002 BA cuts Fresh Approach payments
23 Jan 2002 BA and ABTA at loggerheads over Fresh Approach
08 Jan 2002 ABTA tries to calm Fresh Approach fears
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