WestJet Makes The Change

The speculation is over.

WestJet has unveiled details of changes to its commission structure that will take effect on Oct. 1, 2015 on new bookings for domestic and transborder fares from that date forward for travel beginning October 1, 2015. The carrier said that the changes comes as a result of an initiative to continue to offer low fares and remain competitive.
WestJet Vacations base commissions of 8% on a true-base package price and WestJet groups commissions at 5% on all group fares remain unchanged. As well, all fares on international flights retain the 7% base commission on Econo fares and Flex fares and an increase to 8% on Plus fares.
Lyell Farquharson, WestJet vice-president, sales, said: “After assessing where we want to go with our pricing, we have made the difficult decision to follow a major competitor in their approach to no-frills fares, in this case by changing the commission structure.”

Farquharson continued: “This change could provide an opportunity to lower our fares even more. As new competitors come to market, we anticipate they will follow the global trend in the ultra-low-cost carrier category where no-frills fares are offered without commission.”

He noted as well that: “Deferring the change until October allows the industry time to adjust, and gives us time to meet with our partners to further discuss business transformation initiatives in greater detail.”

The new commission structure on domestic and transborder fares moves from the standard 7% commission on all fares to a fare-bundle commission of 4% on Flex fares and an increase to 8% on Plus fares. Commission will no longer apply on Econo fares. Fares may be combined and the higher commission rate will be paid out on the full booking. Agents will continue to earn commission on WestJet fares sold through the GDS, as they have since 2009.
The carrier notes that its agency sales managers and the field sales team will share more details with the travel agent community over the next few months, and commission information will also be communicated through our agency partners.
In making the announcement, WestJet also included the following Frequently Asked Questions (FAQ):

• Why such a long lead time? Deferring the change until October allows the industry some time to adjust. We understand there is a need of time for agency partners to prepare for this change, as well allowing WestJet to meet with agency partners and discuss the changes.
• Why are Econo fares not commissionable anymore? We have made the difficult decision to follow a major competitor in their approach to no-frills fares, and in order to be competitive in this fare category we also had to change our commission structure.
• Is there a different commission based on booking channel? TA website, WestJet Direct (API) and the GDS channels are all paid at these same rates. All other channels remain non commissionable.
• Can I claim commission in the GDS? Yes, agents will continue to earn commission on WestJet fares sold through the global distribution system, as they have since 2009.
• Does this apply to online travel agencies? No, this base commission structure continues to exclude online travel agencies.
• Does this change affect WestJet Vacations commission structure? No. Commission on WestJet Vacations remains unchanged at 8% and continues to be simple to calculate on no surcharge full commissionable base package price resulting in more commission to you.
• How are transborder flights and flights to Mexico, Caribbean and European destinations affected? Transborder routes fall under the new commission structure. Mexico, Caribbean and all other international routes remain unchanged for Econo and Flex fares at 7%, however Plus fare commission will move up to 8%.
• Does a transborder route include flights to and from Hawaii? Yes, flights to and from Hawaii are included in the transborder routes.
• What is the commission calculated on? The commission is calculated on the base fare excluding taxes and fees.
• Does the new commission structure apply to exchanges? Yes, if the exchange is made to a new commissionable fare option (Flex or Plus), the residual additional collection (excluding any applicable change fees) will be calculated at the new rate.
• Is commission recalled if the ticket is refunded? Yes, if the ticket is refunded any applicable commission originally paid will be recalled.
• If I book an itinerary that includes one segment at an Econo fare and the return on a Flex or Plus fare how is commission calculated? Commission on combinable fare options will be paid at the highest of the fare options selected. Therefore if on a domestic or transborder flight, an Econo fare is booked outbound and a Flex fare booked return, then the Flex fare commission rate of 4% will apply to the full itinerary. Similarly if an Econo fare or Flex fare is booked on the outbound flight and a Plus fare booked on the return flight, the Plus fare commission rate of 8% will apply to the full itinerary.
• How is commission paid out? The way commission is paid out remains unchanged. GDS bookings will be paid weekly through BSP settlement and TA web bookings will continue to be paid out through TIESS.

Go to http://www.westjet.com/guest/en/home.shtml for more.