Will travel agents and corporate travel managers be compensated for selling the airlines’ a la carte services and products?
They should be and likely will be, according to Robert Buckman, Amadeus America’s director of airline distribution strategy. In our third installment covering the evolution and impact of ancillary fees and services, Buckman addresses this pivotal issue for travel sellers and provides a compelling perspective on why airlines will want to incentivize agents to recommend and sell ancillaries to their clients.
Question: “Do you believe the airlines will be willing to provide compensation to travel agencies for selling ancillary services?”
— Submitted by Joe McClure, president, Montrose Travel, Montrose, CA.
Answer: “The commercial model between the agency and the airline – how an airline might compensate an agency – is something we leave between the agency and the airline. We never get involved in commissions or anything of that sort. What I can say from a technology perspective is that we’re an enabler, and Amadeus’ mission is to secure the most relevant content for our customers.
And, what I would say from what we’ve seen in the marketplace is look to Ryanair. Ryanair is a leader in low-cost fares and also a leader in ancillary sales - they actually incentivize their onboard staff to sell services onboard. We’ve seen up to about 10% of Ryanair’s flight attendant wages come from incentives for the sale of onboard services.
So, if airlines are working the flights to sell more ancillary, I can’t imagine that a carrier wouldn’t want to incentivize a very effective selling channel for everything that can be bought pre-boarding, meaning travel agents and corporate travel managers. They’re in the best position to advise their customers.
There is certainly a tremendous amount of revenue potential in ancillary, and the airlines are exploring how to capture that. Airlines are thinking beyond today, in terms of the different services they can bring to the marketplace in the years ahead. Is there an effective argument to say, ‘Travel agents are best positioned to be able to advise their customers on where these products can add value?’ I would bet on the agent being able to do that, and in some cases being able to significantly increase a carrier’s revenue.”