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Philippines' travel consultants push back against airlines
Rosa Ocampo, Manila, June 30, 2015

TRAVEL consultants in the Philippines are up in arms against Philippine Airlines (PAL) and Lufthansa, saying the airlines are eroding their bottom lines through recent initiatives. 


PAL slashed commissions for travel agencies from five per cent of every international ticket sold to 3.5 per cent in March, and then zero on June 1, while commissions on domestic ticket sales were also scrapped in May, earning the ire of travel agencies.


“We’re wholesalers. (Airlines) don’t protect us,” complained Julie Maballo, operations manager of New Era Travel & Tours who, like other wholesalers, is liaising with PAL to restore the commission.


Taher Ben Hamida, director of IATA-accredited Galactica Travels, accused PAL of “killing the travel industry”. He said: “I want to make a mark-up of my own. But with no commission, I cannot mark prices up.”


Ben Hamida added that since the Civil Aeronautics Board has a say in airline ticket pricing, the board should also be looking into the current matter.


Meanwhile, some travel agencies are refocusing on other aspects of business to survive. For instance Ramon Pamintuan, operations manager of Travel People, said his company is now paying more attention to ancillary services such as hotels, travel insurance, and visa processing.


TTG Asia e-Daily understands that PAL has claimed it cannot compete with the lower priced airfares online but is thinking of reinstating the commission or giving travel consultants special rates.


PAL is currently offering incentives in lieu of commission on low-traffic routes such as the Manila-London sector.


On the other hand, the Philippine Travel Agencies Association, Philippine IATA Travel Association and Philippine Marine Travel Agents Association are lobbying against Lufthansa Group’s Distribution Cost Charge.


The three organisations said they support booking via GDSs and pointed out in a press release: “The only reason provided under the announcement of Lufthansa is merely to provide the group’s profitability and refocusing revenue earnings from the sale on flight tickets and not necessarily on consumer experience enhancements.”

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