Air Canada Commission Cuts a Hot Topic at TMP Toronto

Air Canada’s decision to slash travel agent commissions is a major talking point among advisors attending TMP Toronto.

The airline quietly signalled recently that it would be paying travel agencies less. According to The Canadian Press, some retailers saw their commissions cut in half to about 4% or 5% as Air Canada continues to deal with a rise in jet fuel prices that cut into its bottom line.

The airline told the news agency that it is under high cost pressure, largely due to soaring aviation fuel prices. Air Canada said its cost of sales through agencies is growing faster than its revenue gain, something it said was not sustainable. 

The question now is whether the commission cuts are permanent, or only temporary as jet fuel prices remain elevated. TMR reached out to Air Canada for clarification, but the airline did not respond.

Advisors at TMP Toronto this week mostly said that they were made aware of the cuts not by Air Canada, but by messaging from the Association of Canadian Travel Agencies and Travel Advisors (ACTA), the industry’s main trade group representing more than 12,000 travel advisors across Canada.

In a statement, ACTA President Suzanne Acton-Gervais urged Air Canada to reconsider the decision, calling the changes an “unexpected and significant blow” that will have serious consequences for many travel businesses across the country.

“Announced with a short transition period, the changes came as a surprise to many agencies that had already made business, staffing, and investment decisions based on existing arrangements,” Acton-Gervais said, noting that consumers rely on advisors’ professional knowledge and service more than ever to navigate complex disruptions.

ACTA confirmed it has already met with Air Canada twice, formally communicated its concerns to the airline’s executive leadership team, and raised the issue with the federal government. 

Acton-Gervais pointed out that because the geopolitical outlook in the Middle East has improved and oil prices have experienced a significant correction since the measures were first announced, the airline should look at partners as an extension of their network rather than solely through the lens of distribution costs.

“We believe the long-term success of the travel ecosystem depends on a sustainable partnership that recognizes the work travel agencies and travel advisors perform, and fairly compensates them for the value they create,” Acton-Gervais added.

Air Canada, like many other airlines, has opted to cut several lower-margin routes. Some of those were cross-border routes, including Toronto (YYZ) to Charleston (CHS), Montreal (YUL) to Austin (AUS), and Toronto (YYZ) and Montreal (YUL) to New York (JFK).

It has also completely dropped out of a couple of smaller, regional airports that serve smaller communities, including North Bay (YYB) and Bathurst (ZBF). That would save Air Canada money on airport gate fees and operational overhead.

All of these changes are being attributed to the rise in jet fuel prices. According to the International Air Transport Association (IATA), as of the beginning of June, global jet fuel prices were at an average of $152 per barrel. That was adding an extra $100 billion to the industry’s total fuel bill this year, forcing IATA to slash its 2026 global net profit forecast nearly in half to $23 billion.