Changing Situation

In this week’s digital edition of Canadian Travel Press, executive editor, Bob Mowat reports that it’s been a long time – cast your mind back to the 1990s – since Air Canada has paid travel agents for booking its products on the Global Distribution Systems (GDS). As of April 1 that will all change and agents across the country will be able to earn 4% commission on GDS bookings of Air Canada’s Flex, Latitude, Business Class and Premium rouge fares. Web bookings of those same fares will also pay 4%.

The changes come as part of a dramatic overhaul of Air Canada’s Domestic Canada Cash Rewards plan for agents, along with some significant enhancements to its incentive program for its preferred agency partner network.

However, the overhaul of the program also includes the elimination of the 7% reward that Air Canada had been paying on domestic web bookings of its Tango fares and sees those paid on Flex and Latitude fares reduced from 7% to 4%, and on Business Class from 5% to 4%.

Clearly aware of the potential for push-back from the agency community on the changes, Air Canada’s vice-president, global sales, Duncan Bureau told Canadian Travel Press that he expected a “mixed reaction” from retailers and in a letter to agents, he wrote: “No doubt some of you will be disappointed with the removal and reduction of the Domestic Cash Reward.” But he made it clear that Air Canada hadn’t made the decision lightly, having spent 12 months evaluating the situation before making the changes.

During the past year, Bureau said, the airline has been consulting partners. “This has been an iterative process… We’ve talked to them about compensation structure. We’ve talked to them about what’s important for them. We had about 35 of our top customers in the Bahamas and we talked to them about what it [the new reward/incentive structure] could potentially look like. So we’ve had feedback from the travel trade. We didn’t do this in isolation.”

For the full story in this week’s digital edition of Canadian Travel Press, click here.