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AVIS Europe has moved to reassure leisure agents it has "no intention" of cutting commission, despite ending commission to agents on pre-arranged corporate deals.

The car-hire firm said its decision to axe commission on corporate contract rentals will have no impact on agents for leisure or business rentals with companies that don’t have individually negotiated rates.

Director of group leisure sales for Europe, Africa and the Middle East Tom Knopek said: "The decision affects corporate business where we have pre-agreed a special rate. Nothing changes for leisure rentals and we have no intention of making any changes."

He added the move was designed to make rates more competitive where pre-contracted deals meant some agents were earning commission and also charging a service fee.

Chief executive Murray Hennessy said the decision reflected the trend for agents to charge corporate customers management or transaction fees.

But he pledged: "We value our relationship with travel agents and will continue to competitively reward them for the discretionary corporate and leisure business they bring us."

The new structure will initially apply to rental bookings from April 1 2005 in Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Sweden, Switzerland and the UK.

Rival Hertz said it is reviewing Avis’ decision and has not ruled out a change in commission policy.

"At a time when costs are rising and pricing has been highly competitive, distribution costs are one of many areas likely to be examined by car-rental companies in pursuit of savings," a spokesman said.

The move by Avis comes as tour operators are taking a harder line on agency commissions. First Choice is reducing base commission to 10% for consortia agents, while Thomson is refusing to pay overrides to underperforming members.

Ickenham Business Travel managing director Peter Reglar said: "The days of commission in the travel industry are numbered."

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