Spanish flag carrier Iberia launched its first aggressive Internet sales campaign at the end of February, offering 150,000 seats to 30 destinations at discounts of up to 40%. To qualify, passengers simply had to book online.
Travel agents reacted with a week's ban on Iberia ticket sales through their outlets, with the promise of more action if no way is found to include them in the new marketing drive.
The airline justified making its cheapest tickets available only to Internet customers as a way to ensure that the low-cost sales method gains a significant foothold in the market. Company president Xabier de Irala predicts that 30% of Iberia's ticket sales will be made online within the next seven years, compared with 1%last year.
Travel agents, under threat from the new scheme, have reacted angrily. Jesus Martínez, president of the Spanish Travel Agents Federation, complained that the move discriminates against customers without access to the Internet. Until now, 70% of Iberia's ticket sales have been through travel agents, costing the airline large amounts in commission.
Previous attempts by Iberia to cut the rate of commission to travel agents have been successful, although they are being investigated by Spain's competition authorities, citing possible abuse by Iberia of its dominant market position.
The airline, on the other hand, argues that it has to cut costs, but claims that travel agents need not lose out in an expanding market.
In the face of this mounting hostility, Iberia agreed to back down and to allow travel agents to channel future customer sales through its website. This gives them access to previously restricted discount tariffs, while allowing them to charge a commission on each ticket sold.
Iberia is one of the airlines behind the European airlines joint Internet initiative announced by British Airways.
Source: Airline Business
