Air N.Z. losing money through agents policy’

Press, 11 August 1979, Page 11

Air N.Z. losing money through agents policy’

From KEN COATES in London Air New Zealand is losing thousands of dollars worth of business because of its policy not to pay commission to travel agents who are not International Air Travel Association members, says a London agent, Mr Simon Goodman. He said the airline had recently announced that British agents couid earn more than $3 million commission over the next year as a result of its drive to market round-the-world reunion low-cost travel packages. In view of the an-

nouncement that Air New Zealand was offering the 3500 travel agents in Britain the commission, it was reasonable that both members and non-members of the I.A.T.A. should qualify. The S3.M available was said to be based on last year’s visits by 25,000 travellers, each worth a minimum of $l2O in commission. A director of Simms Travel, Ltd, which specialises in travel to New Zealand and Australia, Mr Goodman said his firm produced $13,000 to $14,000 worth of business to New Zealand weekly. “Air New Zealand is restricting its choice of agents and is not prepared to give commission to all,” said Mr Goodman, Who is not an I.A.T.A. member. “The decision has a dictatorial tainting which is unusual for New Zealand.” Mr Goodman said that because he could not get the 9 per cent commission direct, he was booking passengers on Singapore Airlines, Malaysian Airlines, and Thai International. “Air New Zealand could pay the costs of sueing McDonnell Douglas over the grounding of its

DC 10s with what they are losing in fares.” But Air New Zealand tn London defended its policy by saying that as a member of the I.A.T.A. it followed its rulings by paying commission only to agents who were members. While the airline never liked to lose a passenger it believed 1.A.T.A.-mem-ber agents offered the best range of services and the best value for money. Because they could arrange bookings with Air New Zealand direct this meant the best service and choice of routes available. Many smaller agents shared a proportion of airline commissions with 1.A.T.A.-member agents. This was illegal under I.A.T.A. rules but was a widespread practice. “Because of smaller overheads they are prepared to accept a reduced commission,” said an airline spokesman. He doubted whether the volume of business not going to Air New Zealand would warrant a decision to reverse policy. Travel figures showed that more than 70 per cent of British arrivals in New Zealand flew with the national airline.