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Major airlines operating in the United States, including BA, are paying agents commission at point of sale.The payments by European and Asian carriers are made on highly competitive international routes to Europe and Asia.American carriers, which include American Airlines, United Airlines and US Airways, are paying commission at point of sale on both international routes and domestic city pairs.Airlines approached by ABTN have denied they are paying commission but some say they do have specific deals with selected agencies.A well established travel agent in the US told ABTN that payments on international routes had been made by some airlines for several years.Payments on city pairs had begun in the last six months.
The agent said: "What we are seeing here that is different is that point of sale payments are being made on certain transcontinental city pairs, like California to New York."For example, American Airlines is paying commission on this type of routes on tickets from mid-level and upwards, where it gets a good yield, but not on economy. The level of commissions is 8-12%."We get the payment at the time of ticketing, at point of sale. It is not passed onto our clients. It is an extra stream of revenue for us. It's a pretty darn good for us."The agents said that many of the airlines in the Star Alliance, including United Airlines and Lufthansa, and "all" Asian carriers operating out of the States were paying this type of commission.He said Korean Air was paying 18-20% on selected tickets on some of its flights.He gave as another example BA paying 8% commission on flights from Seattle to Heathrow. Northwest Airlines which set up a rival service to BA on this route in June is paying 14%, the agent said."We are seeing aggressive selling in the international market and in the last six months, AA has started paying on transcontinental tickets as well as other carriers now which are offering us special deals on city pairs," the agent said."I guess that a part of this whole thing is that the carriers still care about market share and they have learned, especially in the US, that incentivising at the point of sale drives that share."The agents are being paid on the amount they sell. Some are getting four times their salary from commission."We still have back end overrides and commissions but these are exclusively point of sale commission, different from the back end programme. Airlines have just bought back point of sale commissions which they abolished a few years back."The airlines have realised that paying out 8-10% commission is better than paying out zero."He said the type of ticket on which airline paid commission that varied with Northwest paying further down the scale than many others.The agent added: "They would not be doing this if they did not get results. To see them expanding this programme instead of curtailing it, well, I am kind of enjoying this."They are saying that they need us and we make a difference."ABTN approached six airlines: AA, BA, Northwest, Lufthansa, United and Air France KLM.United declined to comment as it was a confidential commercial matter.BA replied: "We have spoken to our US sales team and they don't recognise what this agent is talking about, as commission is at zero.
"The individual relationships we have with various key travel agents and consolidators around the world is of course commercially confidential."Northwest replied: "Due to competitive reasons, we are unable to discuss details regarding your request for information on agent commissions."AA said: "American, in common with many other airlines, has not paid a base commission in many markets including the USA and UK for a number of years."However, we have continued to work with a select number of travel agency partners who are rewarded for selling our product through an incentive programme."We do not discuss the specifics of these deals as they are commercially confidential."So, nothing has actually changed in recent times."There was no response from Lufthansa and Air France KLM.Visit www.americanairlines.co.uk, www.ba.com, www.unitedairlines.co.uk, www.nwa.com, www.lufthansa.com and www.airfrance.com.