By Martin Kelly

Black Friday, July 1, has come and gone and nothing has really changed.

For those of you living under a rock, this is the date Qantas cut its standard domestic commission to Australian travel agents from five per cent to one per cent.

Meanwhile, generic international commissions are down around seven per cent and will certainly fall further over the next few years.

Therefore the days of making an easy buck by selling an airline ticket are gone, while the era of travel agents charging a service fee is here.

Which is not so bad – service fees have brought prosperity to agents from New Zealand to Ireland, and other sectors of the industry are still offering significant commission rewards.

Certainly, the industry’s major technology providers see it as a business opportunity and have launched a plethora of linked product.

Yet such developments continue to be coloured by sporadic outbursts over airline behaviour – perhaps because it is basic human nature to resist change.

Once again, the airlines – Qantas in particular – are the Bad Guys, an essential character for every long-running melodrama or soap opera.

And that’s what this is.

Just like Days of Our Lives, a lot of things appear to be happening short-term but leave the country for a year or two and you will have missed nothing.

Similar story lines, same major players, a few bit actors killed off and a couple of new stars to get the juices flowing.

In this case, the baddies have done what they always do – looked after themselves first and everyone else second.

But it is important to note that the airlines are still rewarding productive travel agents and chains with higher commission levels.

Some even say that Jetstar, which has proudly declared itself a no-commission airline, is being written into Qantas sales agreements.

Yet selling direct to the public and cutting out the agent remains very much a priority for all carriers.
Of course, technology is at the heart of what they are doing. The internet makes selling direct as simple as saying World Wide Web.

Perhaps travel agents could let bygones be bygones and learn a trick or two from the Bad Guys in this saga and apply them to their own business.

Lesson One: cut costs, create greater efficiencies, improved productivity and increased profits.

For airlines, that generally means sacking staff and outsourcing to cheaper locations.

Now that won’t be feasible for already stretched travel agents, so they can look to some of the new back office and travel management products the GDS are now marketing to save time with all the messy procedural stuff.

All these products also link with service fee software.

Lesson Two: marketing. The airlines are all over the internet using the latest digital marketing techniques.

Now while that might not be suitable for many agents, technology can really help market smaller businesses such as travel agents.

In particular, database management and email marketing offer enormous opportunities if handled with sensitivity and integrity.

The advantages are many - no mailing costs, and the chance to immediately pitch offers to those with a declared interest.

And there are many other opportunities.

Lesson Three: keep a close eye on what the baddies are doing to learn how best to look after number one.

After all, airlines are the masters at that game.


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