British Airways slashes agents' commission fees

Will cut the travel agents' base commission from seven percent to zero as of January next year.

british airways 88 (photo credit: )
british airways 88
(photo credit: )
British Airways on Thursday announced plans to cut the travel agents' base commission fees from seven percent to zero as of January next year joining European carriers Lufthansa and Swiss International Air Lines. Lufthansa and Swiss International Air Lines, were the first companies operating in Israel to cancel the travel agents' base commission fees of about 7% for each ticket they sell. The cancellation of travel agents' commission has become a common policy among European carriers over the past four years, mainly in Germany, Austria, Spain and France, but also in the US, Canada and in South America. "Israel is the last country in the European market in which BA will carry out the change," said Yael Katan, Israel country manager at British Airways. BA is planning to reduce the agents' base commission to 5% in October 2008 and to annul the commission completely in January 2009. "We don't foresee an increase in the plane tickets' prices as a result of the decision," said Katan. "The passenger will pay the cost of the plane ticket to the company and the service fee to the travel agent. There is no doubt in my mind that the travel agent will continue to constitute a meaningful link between the passenger and the airline companies." BA added that the agents' commission fee that was part of the plane ticket's price, will now be presented separately in a different clause. "BA has been carrying out this policy over the past decade in the US, South America and Europe. Israel will be the last European country to go through this change, which is expected to make the company's conduct more efficient," Katan added. Yossi Fatael, director-general of Israel's Tourism and Travel Agents' Association, who vehemently opposes the European carriers' policy said that the association will add BA to the petition it is scheduled to submit to the High Court of Justice against Lufthansa next week. "BA has already announced that it has no intention to lower the plane tickets' prices in the rate of the travel agents' commission fees," Fatael told The Jerusalem Post in response. "This decision will change the entire structure of the tourism industry in Israel. Most of the 600 travel agent offices in Israel will have to close down and only few mega agencies will survive and control this market, as it happened in the UK and in the long run the plane tickets' prices will get more expensive rather than cheaper."