The global travel and aviation industry has been through major changes in recent years resulting in a highly competitive environment.
At the same time, this industry today is in an ongoing crisis - a deeper, more protracted, more fundamental crisis than 9/11, the Gulf War or any of the previous shocks that have beset the industry since the age of mass air transport began in the 1970s.
The crisis is now deepening due to a global economic downturn and a decline in consumer confidence. Around the world, about 30 carriers have failed this year - and there will be more to come as we head toward the traditionally poorer returns of the winter travel season.
A natural outcome of these global changes is that consumers have become more aware of the value of the products and services they pay for. Israel does not fall behind with regards to consumer awareness and demand. Recent legislation in Israel, combined with increasing consumer awareness, has led to the request for heightened transparency with regards to supplied goods and services.
Today, when consumers receive bills from service suppliers, they thoroughly review the items they are charged for, and if they are not satisfied with any of them, they will ask for clarifications from their service provider. Aviation is no different when discussing conscious consumerism.
Furthermore, due to the fact that a large expenditure on airline tickets is not made on a daily basis, it must involve clever shopping.
These global and local market trends have led the airline industry to reconsider pricing structure. For the past decade, airlines around the world have reduced the commission payable to travel agents, especially in western countries, where open competition is the name of the game.
British Airways has done so in the US, UK and all European countries. In fact, Israel is the last country in the European zone where BA still pays 5 percent commission to travel agents.
British Airways announced that from January 1, 2009, it would no longer pay commission to Israeli travel agents on British Airways's bookings. Agents will be free to charge their own scale of service fees in addition to the ticket price. Services offered by agents will be driven by customer needs with agents charging for the services, which their customers require.
THE NEW arrangements will provide agents with flexibility to determine the price they charge to their customers for their ticket sales, giving them more control over their income and enabling them to manage their own business more effectively.
Contrary to earlier reports in the media, the introduction of a service fee by BA on direct sales by it will NOT result in the increase of ticket fares. The airline will decrease the basic ticket fare by the service fee ratio, thus the ticket price remains the same for the customers when buying directly with the airline.
With recent reductions in fuel charges, economy return ticket with BA to London will start at $626, which is $80 lower than the price two months ago.
As a full service airline we have the whole suite of services to provide our customers with top quality flights, including double-daily service, four service classes, a premium economy class - which no other airline Israel offers and is a perfect solution to cost conscious passengers today - and a new state-of-the-art home at Heathrow Airport's terminal 5. We believe that the Israeli customers well appreciate good service and are willing to pay for quality and value they get from their airline as well as from their travel agents. Therefore, we believe this recent change will only make consumers benefit from transparency, greater competition, better service and a much better travel experience.
The writer is British Airways Israel's commercial manager.
