Virgin stays on the right side of the trade
Virgin Atlantic general manager sales, Paul Wait says agents already switch-sell as a result of Virgin’s decision not to drop commissions – and he hopes the new commission scheme launching in May will do even more to boost sales through the trade.
“It has been proven that tactical incentives do lead to switch selling” he told TravelMole. He added: “When British Airways moved to 1% in December, coincidentally or not, our results with the trade in terms of market share improved from about 90% of our agents.”
Virgin’s new commission structure, launching 1 May, offers UK agents up to 7% commission on economy class tickets, 5% on Premium Economy and 4% on Upper Class tickets. Agents receive commissions according to what band they are in, which is decided by how much business agents give to Virgin and what percentage of tickets sold by the agent on routes flown by Virgin are Virgin tickets.
There are five bands – Platinum, Gold, Silver, Red and Blue (for non-participating agents who receive a commission of 1% on all tickets). Mr Wait says there will be some months when agents in some locations can earn up to 10% commission. The scheme been given the backing of ABTA and GBTA following consultation with both organisations. Mr Wait hopes the commission scheme will do even more to boost Virgin’s sales through the trade. “The agents have been great – we’ve had fantastic support from them. Our aim is to be specific rather than treating everyone the same, we want to benefit agents that have been proactive in selling Virgin” said Mr Wait. “Anyone who issues a Virgin Atlantic ticket should get paid for doing that on our behalf” he said. When asked whether he thought other airlines would follow Virgin’s lead with similar incentive schemes, Mr Wait said: “I hope not, I hope they’ll keep on doing what they are doing.” Mr Wait says agents can negotiate with their Virgin account manager to participate in a higher band if they commit to increase market share over the coming year. The scheme will currently work with Sabre and Galileo only because according to Mr Wait, the two GDSs have software that will allow the airline to vary the level of commission being paid to agents according to their location, and to identify the IATA number and location of certain agents to offer tactical incentives on particular routes. He says Worldspan has committed to implementing the software by 1 May, but no commitment has been made by Amadeus yet. Amadeus agents will automatically by paid a 3% commission, unless they should be earning more than that, in which case they can negotiate with Virgin. Agents will receive information packs in the post later this week explaining how to enter the scheme.
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