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A Conflict between Travel Agents and Airlines

It is not enough that travel agents have to deal with problems within the tourism sector because of global economic problems, war, terrorism and epidemics, but it also has to contend with a conflict between the travel agent and airline industries. The latter has emerged as one of the major challenges that the travel and tourism industry has to deal with.

During the past several months, the Greek Union of Air Travel Agencies, with the support of the Hellenic Association of Travel and Tourism Agents and regional associations, has worked untiringly to confront a sudden decision by airlines to immediately drop air ticket sales commission from nine percent to five percent. Airlines, with not a word to agents, and with nothing more than regular mail — not a registered letter — had informed agents they will drop four points off of the standard rate of nine. Not a single airline discussed the change in contract with travel agents.

Since then, the union, and individual agents, have applied to the Competition Committee and have accused airlines of concerted practices and abuse of dominant position. In the meantime, the union has suggested that airlines reconsider. Two airlines in particular have considered the possibility of just a 2-point drop, which would be effective next year so as travel agents get time to adjust to the burden. One airline, however, KLM, has refused to consider any plan and implemented immediate 5% commission payments.

While this is considered totally unfair, and a breach of contract on KLM’s part, the superfluous act of the local Bank Settlement Plan office of the International Air Transport Association in automatically deducting a 5% commission (instead of 9%) without the agreement of both parties — airlines and travel agents — must be called to question.

As the BSP office acts simply as a billing house for funds forwarded to airlines, it has no right to change any agreement made between an airline and travel agencies. It must adhere to existing agreements regarding billing methods. In this very difficult period, it would seem the best thing for all parties in the tourism sector would be to cooperate in every way possible and not take dangerous unilateral decisions.

Yet this appears to be just the beginning. A recent article by the American Society of Travel Agents says the U.S. government is out to help airlines at the expense of travel agents by eliminating incentive fees the computer reservation systems pay to encourage agents to use their networks.

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