Japan-based airlines on April 1 are set to adopt a 0 percent travel agency commission structure for international tickets purchased within the country, taking away a valuable revenue stream for agencies based there.
Japan Airlines vice president of passenger sales for the Americas Steve Smith said changes to the commission structure in Japan are poised to alter some dynamics in the market, echoing those witnessed when U.S. domestic airlines went to zero commission in 2002
(BTNonline, March 25, 2002). All Nippon Airways today also confirmed that commissions on international tickets booked in Japan would go away beginning April 1.
"It's going to be a big adjustment for the Japanese agencies," Smith said. "Culturally, they're just not used to charging for some of these services they provide. That's all being addressed right now and this is going to be quite an adjustment year. What the market will see is the same kind of things that the market saw here. You'll see some agencies begin to merge, smaller niche agencies that were doing business will probably either go away or get purchased and you'll see the big corporate agencies survive as they start to figure out what the optimum value proposition is for them."
The Japanese market has seen its commissions, which currently stand at 5 percent for international bookings, shift downward since 2001, when they stood at 9 percent.