Flight Centre Confronts Airline Commission Cuts
Skift Take
Two decades after U.S. airlines eliminated base commissions for travel agencies, Australia's Flight Centre Travel Group, an online/offline leisure and corporate travel agency, and others in the region are grappling with the issue.
Here are six takeaways from Flight Centre's first half of fiscal year 2022 financial report, which it delivered Thursday.
1. Flight Centre Said It Can Offset the Airline Commission Cuts ... But Can It?
Flight Centre said airline base commissions to travel agents stood at about 3.7 percent on average pre-Covid. But now that Air New Zealand and Qantas cut commissions to around 1 percent or so on long-haul flights and zero on short-haul flights, those average commissions have fallen around a point or two globally.
Melanie Waters-Ryan, Flight Centre's CEO of Leisure, told analysts the company can offset those commission slashes by working with the airlines on private fares and selling ancillary services, such as seats and bags, where margins can be 4
