Travel agents see bad tidings in airline contracts

By Harry Keaney

Contracts for the coming year have gone out from Aer Lingus to U.S. travel agents for signing, but some members of the Irish Travel Agents Association are anything but happy with what’s proposed. That’s because, according to some ITAA members, their commissions will be reduced under the new contracts. Some agents also complain that they will not be able to reach Aer Lingus booking targets to enable them maintain previous commission levels.

However, Brian Murphy, vice president of sales and marketing with Aer Lingus, disagreed, saying that the contracts give travel agents the opportunity to make more money.

"In certain markets, specifically Boston, we are growing by more than 30 percent in 2000 in terms of total number of seats," Murphy said. "With that, it gives travel agents even more to sell and even more earnings and commissions."

Murphy added that while many airlines had implemented commission caps and reduced commissions, Aer Lingus had chosen to retain commissions at 8 percent without caps.

Agents contacted by the Echo declined to discuss their individual contracts because of a confidentiality clause. Murphy also declined to discuss individual contracts, saying, "The contracts we have with anybody are all confidential."

But one angry agent accused the Irish airline of doing what he said the airline industry generally is trying to do — cutting out the agent. "Basically, they are trying to cut our livelihood," the agent said.

"We are fighting for our lives," added another agent. "Other airlines are cutting back on smaller agents, but they’re taking care of the agents who give them substantial business. We have been supporting Aer Lingus for 25 years."

But Murphy said that with Irish travel agents and all travel agents, Aer Lingus traditionally had contracts in place based on productivity enhancement. He said that it was not uncommon that the incentives involved would be based on market share and performance above what would be normally expected.

"From year to year, the performance of different travel agents will vary based on market conditions and Aer Lingus has to make adjustments based on these market conditions," Murphy said.

The contracts are due to be signed by the end of this month but some of the more disgruntled agents will probably be seeking further negotiations.

Murphy, however, was optimistic that most travel agents will sign their contracts with Aer Lingus. "By and large we will have contracts with most, if not all, of our travel agencies of the past," he said.

ITAA members claim they give Aer Lingus between $20 million and $30 million worth of business annually.

Technology is also threatening the travel agents’ future. Using the internet, customers may now seek out the best bargains and book directly with airlines.

But the agents say they provide the all-important personal touch that helps customers with unforeseen difficulties, as well as with planning package vacations.

And many Irish travel agents say they not only put bums on airline seats but also promote and sell Ireland itself as a tourist destination.

Despite the advances in technology, however, Murphy sees a role for travel agents. "As long as travel agents can add value for a customer with their expertise and knowledge, there will always be room for good, efficient and smart travel agencies," he said.