Air France KLM has revised its trade commission structure effective December 1.
ASATA has noted with disappointment the decision and announcement by Air France KLM to revise its trade commission structure effective December 1, but must reiterate that it is not ASATA’s mandate to get involved in commercial agreements between travel agents and airlines.
ASATA’s mandate is influenced by the Competition Act that states that an association is, by nature, a group of competitors joined together for a common business purpose, an association satisfies what would ordinarily be a difficult element in proving an anticompetitive violation.
As such, any association activity that arguably could be perceived as being anticompetitive exposes ASATA and its members to the risks and consequences of the Competition Act and its watchdog, the Competition Commission.
Historically, the most significant area of antitrust concern for associations has been price fixing. Price fixing is a very broad term that includes any concerted effort or action that has an effect on prices, terms or conditions of trade, or on competitors. Accordingly, ASATA and its members should refrain from any discussion that may provide the basis for an inference that they agreed to take any action relating to prices, services, production, allocation of markets or any other matter having a market effect.
The decision by AF/KL also falls within the following Resolutions and cannot be challenged:
IATA Resolution 824 stipulates:
for the sale of air transportation and ancillary services by the Agent under this Agreement the Carrier shall remunerate the Agent in a manner and amount as may be stated from time to time and communicated to the Agent by the Carrier. Such remuneration shall constitute full compensation for the services rendered to the Carrier.
APPLICATION OF THE TERM ‘COMMISSION’
PAC1(29)824a(except USA) Expiry: Indefinite PAC2(29)824a Type: B PAC3(29)824a
RESOLVED that, for the purpose of the Passenger Agency Conference Resolutions, where applicable, the term “commission” shall be deemed to include any form of remuneration.
Despite this, it is with anger and disappointment that our members took note of the recent announcement.
In a market where travel agents deliver around 80% of all airline sales, it is astounding that airlines still do not appreciate and reward this effective distribution channel. In no other industry are the biggest sales channels shown this level of disdain for their efforts.
To add insult to injury, this announcement comes off the back of a massive strike action in which the same travel agents stepped in to assist thousands of affected Air France passengers, at no cost to the airline.
The courtesy of engaging with the travel agent representative body prior to choosing to implement a change of policy of this nature would have also been highly appreciated.
We congratulate those airline that continue to show support to the travel agency sector; respect and value the role that travel agents play and reward them in a manner that is appropriate to the efforts.
Finally, ASATA will be looking specifically at the impact of actions like these on its members and assess future scenarios so that members are equipped to review their current business models and prepare for changes in the industry.
ASATA CEO Otto de Vries has just returned from a whirlwind trip to San Diego to attend the WTAAA, PAPGJC, the Airline Distribution Stakeholders Forum and World Passenger Symposium.
In addition to being elected deputy chairperson of the WTAAA, Otto reports that most of the focus at the PAPGJC meeting was to prepare various submissions to PAConf, including:
- Processing review requests from an Agent or Applicant in terms of resolution 820 – reviews by the Travel Agency Commissioner
- Review of Resolution 890 allowing Travel Agents to use cards issued in the name of the Agent to be used in connection with the sale of a traffic document.
The outcome of discussions was unfortunately that amendments to Resolution 890 in any form were defeated. ASATA and its partners are currently preparing additional amendments that may satisfy the airlines and we hope to submit again with a mail vote.
Amendments to Resolution 820 passed the conference floor without any amendment.
Otto was also invited to participate in a panel discussion in the open plenary session of the World Passenger Symposium entitled ‘100 years of aviation and beyond, the lens of the customer’.
The discussion looked at what the value proposition to customers should be in 2030 and does the industry vision match customers’ expectations. Some of the key takeaways at this panel included:
- With the introduction of LCCs the airlines have commoditised their own offering, with a race to the bottom in terms of price and offering.
- Cost savings are impacting on the passenger experience.
- Marketing is not honest. The customer sees the business- and first-class offering and gets something else, leaving them disappointed.
- The average person spends four hours searching for the best airline deal and are generally overwhelmed by this task which is a huge marketing opportunity for the travel agent).
- When asked about airlines acting as retailers, the sense was that nobody really cares if they do, but that they should focus on the flying and customer service delivery, not only in the air but also on the ground. Airlines were said to be constantly failing their customers when things went wrong.
Says Otto: ”When one of the panelists noted how useful it would be if there was a concierge or private club type service that could handle the entire end-to-end offering, I had to chuckle. In my panel discussion I commented that this service has existed for a very long time in fact. We call them travel agents!
“Our panel gave me a chance to highlight the travel agents value, the end-to-end offering, the time saving and to note how the airline component was only part of the total offering and value of the travel agent. I highlighted the future of the travel agent was bright and that we would continue to add value to the customer and the supply chain.”
ASATA’s hopes to submit the proposed amended financial criteria for this BSP region to the PAConf meeting taking place this week in San Diego, 16 October have unfortunately been dashed.
The stumbling block is the proposed Default Insurance Product (DIP), which makes up a part of the submission, as a result of the product policy document submission to IATA does not comply with the IATA Global Policy Template. As a result, an independent local legal review has been initiated to ensure legal compliance with South Africa legal jurisdiction requirements. This review process was finalised at the beginning of September 2014 and IATA is now waiting for the DIP provider to review the comments and proposed amendments with its reinsurer.
On receipt of the feedback and/or acceptance of the proposed amendments to the policy document, IATA will be able to to proceed with the formalisation, subject to no dramatic changes to the product structure and terms and conditions. While all efforts are been taken to expedite this process, IATA needs to ensure that there is a a comprehensive review and compliance of the policy as it relates to this form of agency financial security.
On acceptance we will not wait for the next PAConf to take place, but rather we will request for a mail vote on the proposal.
ASATA is obviously frustrated and disappointed by this latest delay and although it might seem to all that IATA are being difficult. We have it on good authority that they have been caught out time and again with insurance products that don’t deliver. IATA thoroughly looks at the ability of the local insurer and re-insurers and that they meet IATA’s financial requirements.
As excellent as social media and review sites can be to get your brand out there, they are just as effective, and speedy, at damaging it.
Sticking your head in the sand will certainly not make negative publicity go away. Customer-facing organisations like banks and retail chains pay thousands to maintain a positive brand reputation. It takes loads of listening, constant engagement and proactive communication to get it right.
In a world where travellers go online to check the reputation and status of companies with which they’d like to do business, it is essential that you paint a positive brand picture and encourage those who do business with you to do the same so that when a customer finds you online, they feel overwhelmingly positive about the prospect of having you assist with their travel arrangements.
And are 5 handy tips to polishing your online persona, without spending a fortune:
- Are they talking about you? What are they saying? Assess what the current perception is of your brand. What online channels are your customers using to talk about you? Hello Peter? Facebook? TripAdvisor? What are they consistently saying? You can use tools like Social Mention <link to www.socialmention.com/>and Google Alerts <https://www.google.com/alerts>and Hootsuite <https://hootsuite.com> to monitor any mentions that are made about your company.
- Is their perception accurate?
Are the perceptions accurate? If customers continuously slate your brand for poor customer service, perhaps they have a point? No amount of damage control is going to work if the fundamental issues your customers are complaining about are not fixed. Appoint a task team comprising staff from all areas within your organisation, e.g. to identify what these are, how to fix them, and who will be responsible for what? This team should meet weekly to ensure concrete steps are being taken to solve the issues.
- Listen, learn and engage.
Monitor conversations and respond quickly to concerns raised. Your messages should be empathetic, not robotic, with a genuine tone of ‘wanting to assist’. That said, a quick, brief reply is better than a late reply with lots of information, or no reply at all. Consistency is key. Monitoring and engagement should happen continuously, not as a once off when you start your image management initiative. Learn from your mistakes, give feedback to the ‘offending’ parties that have caused the criticism. Engage with the customer till the situation is as resolved as it can be.
- Your online business card
Treat every online brand presence as your business card: Google’s search results can be influenced by brilliant Search Engine Optimisation so ensure your meta-descriptions, keywords, etc. are well selected and written; Ensure that happy customers post positive reviews on Facebook and Hello Peter; Generate positive PR about what you do and why you can be trusted; Position yourself as an expert in your niche by creating and distributing online useful, engaging and informative content about what you do to enhance your credibility, e.g. honeymoon specialists providing content on tips for romantic breakaways.
- Repeat and referral rocks
Have a clear repeat and referral strategy that encourages ‘happy’ customers to proactively talk about their experience with friends and family. Ask for a referral or review on Hello Peter or Facebook, proactively ask for feedback on how you can improve their experience. And once you have the referral or review, thank them for giving it.
Remember it’s a journey not a destination, but as long as you keep listening, engaging and improving your positive reputation will make you famous.
Banish the boring business trip and embrace a blend of work and play. Enter the world of bizcations, a perfect mix of business and vacation and the term most popularly used to describe the growing trend towards business travellers tagging on a leisure experience before or after a business trip.
This is where an ASATA agent can add value as the travel expert, offering guidance on how to enhance a business trip with complementary leisure experiences. Travellers can save time and money by relying on their ASATA agent to find them the best leisure deals for their bizcation.
Although bizcations are nothing new, the introduction of Gen Ys in to the workforce, whose lines between professional and personal life has blurred, has meant increasingly traditional business travel is enhanced with a leisure experience, according to research.
A recent survey conducted by Hotwire.com revealed that almost half of American adults used their business trips to discover a new destination. The survey found that younger travellers, defined as 18 to 34 years old, were more likely to mix business with pleasure compared to their older counterparts.
A similar survey among US business travellers by SKIFT and American Express revealed that the chance to explore an area topped the list of reasons road warriors would turn a business trip in to a vacation. Business travellers also cite the benefit of visiting friends and family in the area as a key reason for extending their stay.
The growing trend of bizcations comes as increasingly corporates allow for more flexible travel booking guidelines giving business travellers the opportunity to expand their travel horizons.
Travellers may have little say about having to do a business trip, but that doesn’t mean they can’t take advantage of the opportunity to explore a new destination, particularly as hotels in these business hubs are often left having to fill their rooms over the non-busy weekend periods and therefore offer very affordable deals.