Issues & trends
from the agency’s bottom line. “Qantas is paying less to the GDSS and therefore the GDSS are saying they can’t pay us. This is a massive loss of income for an agency of our size, and as big a deal as losing commission. I don’t think many agents are really understanding that.”
One network of agents estimated it will lose up to $4m in revenue from
GDS rebates.
“Qantas has made this change and altered the commercial model but they are not taking responsibility for it,” one manager said.
GDSS declined to discuss specific arrangements although Travelport acknowledged commercial models are changing as the industry adapts to a new world of distribution.
“If value is recognized, then it should be rewarded accordingly, however this may come with a change to the model we have all been used to. We are going through a period of change in terms of economic models, full content, private channel, airline incentivizing NDC, and we anticipate more experimentation to come,” said Scott Barber, Managing Director Australia and New Zealand, Travelport.
But in addition to the loss of rebates, there is irritation among agents over a perceived lack of information about the benefits the Qantas Channel may bring.
The airline has spoken of the QDP and the “enriched content” that will flow though the channel, but some insist little in the way of identifiable earnings potential has emerged.
Joint Managing Director of the
Goldman Group, Anthony Goldman, told travelbulletin it was “disappointing” that Qantas, who he described as a major partner, “has not managed to articulate the overall plan to agents”.
“At this stage, the Channel will result in little benefit to us and mean a loss of crucial GDS rebates on Qantas sectors,” he said. “Qantas do talk about the benefits the Channel will have but have failed to provide real tangible examples of how agents will be able to use the Channel to maximise earnings.”
Some, however, are taking a more philosophical view. Peter Hosper, Managing Director of The Travel Authority Group, likened the loss of rebates to commission cutting. As then, the industry must “reinvent itself”, he said.
“Ultimately this is no different from when we went to zero commission domestically and we had to start charging a fee,” Hosper said. “That was a big learning curve for agents, and this will be something similar. The expectation is that the QDP and Qantas Channel will create opportunities for extra revenue and commission. That is what Qantas is flagging.”
Reho Travel Managing Director Karsten Horne admitted to feeling “uneasy”, adding agents were losing a revenue stream without being able to demonstrate to clients exactly what new products it could offer. Until that happens, raising fees would be difficult, he suggested.
Nevertheless, he remained optimistic. “Providing the benefits really are there, that’s when fees can come in and we should be able to recover the GDS fees,” he said.
CTM Founder and Managing Director Jamie Pherous agreed that agents could prosper.
He declined to comment on any new deal it had struck with Qantas, or quantify any loss from GDS rebates, but suggested agents could financially benefit from the new product to flow from the QDP.
Sales of ancillaries products in particular are highly valued by airlines and they will be prepared to pay, Pherous said.
Qantas acknowledged that any transition “can be difficult” and on its website conceded that agents’ commercial relationship with GDSS “may be impacted”. But the carrier told travelbulletin it has “no visibility” of the arrangements between GDSS and agents, and declined to reveal details of its own terms with technology providers.
“The Qantas Channel is very much an outcome of our vision, however, it would not have been possible without entering new agreements with our GDS and technology partners,” Qantas’ Executive Manager of Sales and Distribution, Igor Kwiatkowski said.
As for new content, the airline said the QDP has the capability to offer it today, and will be progressively implemented over the next 12 months as “GDS and technology providers continue their NDC rollouts”.
Special offers for frequent flyers, dynamic agent commissions and additional price points will all feature.
The carrier has also told agents that the QDP and Qantas Channel is far from a project to cut costs.
“Our approach to QDP is solely an investment in the indirect channel, ensuring our agency partners have access to a wide range of innovative and new content,” Kwiatkowski said.
“Our investment in this program will ensure the that gap between our indirect and direct distribution systems capabilities does not continue to widen.”
He added: “The QDP is about providing more through indirect channels than is available today and we are only scratching the surface on what new commercial opportunities this will present.”
The next 12 months will go some way to determining what those opportunities may be.