Travel agents “may as well start packing up their desk now” as Qantas prepares to slash the multimillion-dollar industry commission from 5% down to 1%, with major airlines following in the national carrier’s wake.
Qantas — which is currently battling PR crises including cancelled flights, lost luggage, and major delays — was the first airline to announce it was cutting agent commissions, according to Australia’s peak body for travel agents.
Afterwards, Emirates, Air New Zealand, Hawaiian Airlines, Singapore Airlines, Cathay Pacific, and American Airlines all announced they would do the same.
It’s “hardly worth turning on the PC for the pittance that we would be paid”, director of Meridian Travel & Cruise Jodie Quick tells SmartCompany.
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“We are seeing more clientele throw away their loyalty to the airline and it will only get worse,” she continues.
Quick says her travel agency offers a premium level of customer service and takes an international booking fee on each ticket sold.
But for others who don’t add a fee, she says losing 4% commission could be the final nail in the coffin, particularly considering businesses were already struggling from international lockdowns smothering travel.
“Agents who don’t add fees, well, they may as well start packing up their desk now,” Quick says.
The talk among Quick’s wider industry network is that travel agencies will prioritise selling airlines that pay commission, though “sadly there are not many of them left”, she admits.
And Quick says that spells bad news for the consumer, who would need to wrangle any booking issues with Qantas call centre staff “who know very little”.
Recently she helped a friend with Qantas travel credit to book a multi-city ticket where, for instance, you fly into Paris, but fly home from Athens.
Qantas’ online booking system doesn’t permit these sorts of ticket sales, so Quick rang the airline.
The “newly-trained” call centre worker said there was a ticketing error that would be sorted “shortly”, Quick says, so she ended the call and booked her friend’s flight through her own booking system at work.
Days later, however, her friend received two separate flight confirmations.
“Unravelling another Qantas mess, it appears the Qantas call centre representative had received no training on redeeming vouchers and ticketed the return fare to Europe on a $400 voucher!” Quick says.
“Now, if that’s an indication of money that will be lost, it shouldn’t be too long before the airline’s in the ground.”
In April, Qantas hired an extra 750 staff to manage the phones after a woman who was put on hold for eight and a half hours made international news, but the airline said it would take six weeks to train staff up.
“Our call volume has increased from an average of 7500 calls a day to 14,000 calls a day,” the airline’s statement read, continuing that “by June this year, we’ll have increased staffing by 200% (an increase of 750 people) within 12 months”.
Ten days ago, Qantas CEO Alan Joyce claimed call wait times for customer service had dropped to just three minutes on average, saying it was the best in the business’ history.
“We believe that the call centre now is fixed,” Joyce said on 2GB radio on Friday, June 17.
“And nobody waited over 20 minutes [on Thursday], so it’s a big improvement … It’s better than it was before COVID-19.”
But Quick reports industry call wait times exceed three hours at the moment.
“I can only assume it will be double for the consumer come 1 July,” she says.
It is a sentiment echoed by SmartCompany readers. Bianca Graham says she “can’t wait to see what happens post-July 1 when the majority of retail travel agents stop selling Qantas because Qantas [has] cut their commission to 1% of the airfare component. Call centres are already inundated”.
Likewise, an anonymous reader wrote: “Just wait until 1 July when travel agents get paid $0 to sell QF and will be pushing the business back on them. The times will blow out even further.
“Good luck Alan, you’ve had a year to prepare, I hope you’re ready!”