Commission Cut by British Airways
Travel agents oppose, demand new incentive package
Star Business Report
British Airways' (BA) unilateral decision to drastically cut commission on ticket sales in Bangladesh evoked sharp reaction among its travel agents here. In a bid to impose a service or management fee on air travellers, the airline cut such commission to one percent from seven percent, according to the business insiders. As many as 40 agents in a meeting, chaired by M A Muhaimin Saleh, president of the Association of Travel Agents Bangladesh (Atab), yesterday reached a unanimous decision to urge the BA authority to reconsider its move saying that it is 'unacceptable' to them. The airline's new decision had also surprised and angered them, they added, suggesting introduction of an incentive package keeping the seven percent commission in place. The BA in a letter to the Atab chief informed that the new commission rate would come into effect from April 1. "The current seven percent commission represents the vast majority of our overall cost of sales in Bangladesh and as it is heavily discounted which fails to add any kind of value for money to the British Airways," the letter mentioned. The airline has already introduced service fees on direct sales and it is acceptable that most business agents charge for services as 'meet and greet' and transportation, it noted. So, the concept of charging for the agents' services is not a new one, it added. Responding to the letter, M A Muhaimin Saleh opposed the commission cut on the plea that the time chosen for bringing the changes in the trade is not appropriate. "Not long ago our commission was reduced from nine percent to seven percent and the airline's move to reduce it to one percent is shocking to all of us," he said. To make up for BA's overall cost you may at best charge your walk-in passengers a service fee, the ATAB chief suggested. The airline, however, explained that the new move is aimed to make a specific charge for service customers need at individual level. It said it would go for reduction in the number of BA agents having ticketing access and all agents are required to introduce their own service fee structure. The new system would improve margins and profitability of the agents' sales, it also expressed its hope in the letter. Muhaimin Saleh told The Daily Star that the commission cut would create an opportunity to remit huge amount of foreign currency from the country. Around six million dollars were remitted from the country annually due to such commission cut by only two per cent earlier, he noted. He said all other airlines have been offering the travel agencies a seven percent commission to cover up the cost of sales. The British Airways is carrying about 25 percent of the traffic to Europe and USA from Bangladesh.
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