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Airlines and AgentsMarch 3, 2008 By: Travel Agent Central Contributor Travel Agent
LAST WEEK, I READ WITH SOME FASCINATION AN ARTICLE ABOUT AN OFFICIAL from IATA who was giving a talk about the role that travel agents play in the distribution of airline tickets. Ibrahim Kamal, a country manager for IATA, was addressing the Dubai Travel and Tour Agents Group. He suggested that 75 percent of all airline sales come through travel agents, which amounts to more than $187 billion!
I just have to say, "wow." And whenever I talk to agents, many of them tell me that they no longer book air for their clients. Clearly, however, more than a few of you are still making air arrangements and, for the most part, the airlines are still expecting you to do this for nothing.
What was disturbing was the apparent disconnect between Kamal's comments and the solutions he is suggesting. In the article, he refers to an airline executive who "...once told me he expected 95 percent of their sales to come through the web; it didn't happen, and it never will. He noted how 10 years ago, the industry predicted that travel agents would become obsolete as consumers became more Internet savvy. But 10 years on, we can confidently say that travel agents are needed and their role will grow..." He told agents to view the Internet as an opportunity, not a threat, but stressed that in order for them to harness technology, they desperately required formal training.
The Future of the Agent/Airline Relationship
Let me preface my next point by mentioning that I am a big proponent of travel agent training, and our Travel Agent University is by far the largest and most successful agent education portal in the industry. With that said, here is where I take issue: Is he suggesting that airlines are going to provide this formal training? It seems somewhat disingenuous to suggest that agents should get trained so they can book more air tickets, so that, in turn, the airlines can make more money. Yet these same airlines refuse to pay these agents a reasonable commission despite the fact that they serve as the airlines' primary sales and distribution outlet!
I challenge IATA airlines, as well as all other air carries, to review their travel agent policies, and consider the impact that an intermediary marketing channel, such as the travel agent, can have on a commodity such as an airline seat. Airlines spend millions on loyalty and reward programs and even more on consumer advertising and promotions. And the folks that are responsible for generating three quarters of their sales—you travel agents—are taken completely for granted.
Where are the agent loyalty programs? I'm a realist, so I am not necessarily suggesting a return to the early 90's and 10 percent commissions. But those airlines that wise up, recognize your ability to drive market share and higher yields by creating real incentives for agents, will benefit hugely from the business you can shift their way. And at a time when the airlines are offering notoriously bad customer service, having this loyal, motivated travel agent sales force might even serve to defuse some of the passenger anger by providing that much-needed personal touch.
Kerry J. Cannon, JR.