The uprising by travel agents was prompted last year when Cintra reduced their commission from 10% to 7% on domestic ticketing. At the heart of the reaction to the move, which put commission rates at international levels, is a deeply rooted resistance and inability of many Mexican business sectors to pay the price of globalisation.
Martens, Pasquel and Flores deemed it necessary to align commissions with those paid by most competitors. Worldwide, commission cuts have been the rule. In 1997, United caused an uproar with cuts from 10% to 8%. The move was imitated by all major US carriers. Today, Continental, Delta, Northwest and United, and others, pay a commission rate of 5-7%.
In Europe, strategies have differed. Iberia cut commissions from 9% to 6.5% on domestic routes and 7.5% on international services. British Airways, Air France and KLM pay 7% on domestic and international routes and SAS pays 4% on domestic and 7% on international and overseas routes.
In their protest last December, the 2,518 affiliates of the Mexican Society of Travel Agents and the Confederation of Travel Agents Associations blocked airline telephone lines, computerised reservations systems and other access venues and disrupted Christmas holiday traffic with a flood of phantom bookings.
A recent survey, however, indicates a change of heart, with slightly more than 40% of Mexico's travel agents and wholesalers, mostly the leading operators, believing the commission cut was justified, since air travel is an industry with rapidly shrinking margins and a capacity glut. Competition has forced travel agents in parts of Europe and in the USA to offer customers other value-added, personalised services, an example most Mexican travel agents have not followed. Of the agencies, 60% earn 85% of revenues from airline commission
Source: Flight International
