Australia's Qantas Airways yesterday said on April 1, 2006, it would cease paying domestic base commissions to travel agencies and reduce international base commissions from 7 percent to 5 percent.
"The reduction in commissions is in line with global trends and with Qantas' stated aim to reduce distribution costs," said head of sales and marketing Rob Gurney. "In some overseas markets, airlines have removed commissions entirely and travel agents have adjusted to new income models."
Qantas has been considering changes to agency compensation since late 1999, when regional competitor Singapore Airlines led the industry in completely eliminating base commissions
(BTN, Dec. 6, 1999). Singapore's move was followed by similar decisions at many carriers around the world, including Qantas partner and then part-owner British Airways, which in early 2000 announced its intentions to change agency compensation programs
(BTN, Jan. 24, 2000).
Qantas this past January cut international base commissions from 9 percent to the current 7 percent level. In July, domestic Australian base commissions were lowered from 5 percent to the current 1 percent level
(BTNonline, Sept. 8, 2004).