Capping To Begin In Japan?

<B> Capping To Begin In Japan?</B>

By Mike Jacobs

Travel management companies in Japan believe the introduction of commission caps is inevitable due to the ongoing erosion of agent commissions on airline sales.

With the advent of a higher U.S. airline presence in Japan, corporate agents are arguing that commission capping moves, disguised as marketing systems, are being put into place.

Said Carlson Wagonlit Japan director Guy Mackee, "Reductions of commissions are inevitable, but no airline wants to bite this bullet yet. Over the past 12 to 18 months, overrides have been reduced and in some cases eliminated. Combined with an increasing tendency for airlines to conclude direct corporate contracts--in some cases with commission capping--there's a fairly clear indication of the direction we're heading in Japan."

Japanese airlines now are offering companies up to 25 percent off high yield seats.