The issue of airline fees and surcharges has been making its way back into the forefront recently. It seems that although the airline and travel agency partnership continues to evolve in a positive way by producing new business ideas, opportunities and resources, fuel surcharges remain an issue at odds in the business relationship. The frustration of ongoing fuel surcharges year after year reverberates with Travel Agencies in Canada and around the world, and there is a strong belief that fuel is a cost of doing business, an inherent part of the airline’s operations, and should be included in the base airfare.
A collaborative Travel Agency and Travel Supplier Partner network is critical to building a vibrant travel industry and one must wonder why we continue to hear that airline surcharges are rising disproportionately to the base price. The perception in the Travel Agency community is that year after year some airlines continue to shift a growing percentage of the total price of an airfare into the fuel surcharge or “carrier surcharge” category.
In 2010, the Canadian government imposed advertising rules, which forced travel organizations, including travel agencies, tour operators and airlines to disclose the amounts of taxes and fees being charged. Despite the federal rule of transparency in airfare advertising, member feedback is that the additional surcharges can mislead consumers to believe the government taxes and fees associated with their airfare are higher than they actually are. The International Airline Transport Association (IATA) defines the carrier surcharge as a charge for airline use only. Therefore, this allows a carrier to define what they want to charge and file under that category. It creates an issue of transparency, rather than correcting it. Additionally, and as ACTA members are well aware, the higher the ‘surcharges’ the lower the base commissionable fare.
ACTA is very encouraged to see airlines such as WestJet, Qantas and Singapore eliminate the surcharge outright and as a result, they have raised their base fares. This move has been positively received in the Travel Agency community. We hope you will join ACTA in commending these carriers for their action, and encourage others to follow suit.
What does ACTA recommend to help you earn the most commission when searching for travel options for your clients?
We suggest that when searching for travel options for your clients, try and get away from searching on the criteria of lowest base price and start setting your criteria based on highest commission. You will see a positive difference in your commissionable earnings and a negligible difference in the overall price for your client. Our research shows that often the lowest base fares include a higher percentage of airline surcharges. By using this search tactic, your client receives the best experience, at the best price, and at same time the Travel Agent maximizes their earning potential. ACTA will continue to advocate on behalf of our travel agency members on this very important issue and will provide further updates in the coming weeks.