EC commission fine just doesn’t add up

EC commission fine just doesn’t add up

The European Commission’s ruling on British Airways’ commission payments is barking mad. If the carrier had been punished for a particular act of predatory pricing or over the unpopular Performance Reward Scheme, there would have been some logic to the decision.

But the EC is fining BA £4.4m for extra commission paid generally over the past seven years. The EC says:”BA has been offering travel agents extra commission payments in return for their meeting or exceeding their previous year’s sales of BAtickets.”

Really?What possible other reason would there be for giving extra commission payments? Paying more money for extra sales is the oldest trick in the book. Virtually every airline and tour operator does it and the practice is rife in just about every other industry you can name.

Virgin Atlantic’s PR guru Will Whitehorn has been spinning the line that agents will now be able to give more independent advice. Well, nobody’s told Virgin chairman Richard Branson. He’s urging agents to support his airline in return for 10% commission (see page 4).

Agents will rightly push companies which support them, provided the product is right for the customer.

If BA can’t cut deals with agents then no-one should be allowed to. Do you agree?Write to me with your views to the address below.

Jeremy Skidmore – editor


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