Arlington, Va.—Airline commissions paid to travel management companies are seeping back into the industry as competition for marketshare, especially for premium fares, heightens as business travel demand continues to suffer, BCD Holdings owner John Fentener van Vlissingen told reporters here on Friday before the annual Netherland-America Foundation Awards Dinner, where he was being honored.
"Because of the economy and because those airlines have to fight, some of them are coming back with commissions and that's very interesting for us," said van Vlissingen. "Somewhere, we hit the bottom, and we have now some airlines, and it's a growing number who are starting to give commissions again. It's not our choice. It's their choice."
Van Vlissingen noted that a lot of those commissions are coming from premium class travel in Europe, where because of country sizes many flights are international flights where competition is higher. "That's not something we pushed," he said. "We helped them a little bit, but they are coming back."
BTNlast week reported that British Airways has brought back incentives to some U.K.-based travel management companies on transatlantic routes. Commissionable segments for most major carriers in their home markets largely disappeared in 1999, replaced by airline-agency override programs, in which TMCs are paid on accomplishing marketshare goals.
"In the old days, it was the airlines who would pay," van Vlissingen said. "That has changed dramatically. Now it's the client who pays. I remember when 75, 80 percent would come from the airlines and it's flip-flopped to the other way around. It's not yet dramatic, but it's growing."