Cheap Tasman flights upset agents

By CHRIS DANIELS aviation writer

Today's launch of new transtasman cut-price services by Air New Zealand is expected to again set off a war of words between the airline and the travel industry.

Air NZ hopes its pre-emptive move to slash fares will stimulate traffic and make life more difficult for its rivals, particularly budget carrier Virgin Blue, which is expected to start flying the Tasman about the same time Air NZ's "express-style" service is launched on the route.

Hot meals and free alcohol will go, although business-class seats will still be offered, unlike Air NZ's domestic services. Air NZ chief executive Ralph Norris said last week that the airline had only just started making a small profit on the Tasman route.

What will anger the travel agents is the expected axing of commission for tickets issued on the flights.

Agents booking travel across the Tasman now earn a 5 per cent commission, with 9 per cent earned on other international flights.

Air NZ stopped paying commission for all domestic travel when it unveiled its express model last year. It now pays incentives and bonuses to agents if they sell more than a certain amount of travel.

Qantas still pays agents commissions, but many are moving towards charging consumers fees for booking travel, rather than relying on airlines for their income.

One fear among agents was that Air NZ charge customers more for tickets if they were purchased through an agent, rather than using the internet or its call centre.

United Travel, which has 70 offices around New Zealand, announced yesterday that it was about to start a marketing campaign in an attempt to persuade consumers to use travel agents.

Air NZ's new online transtasman booking service was presenting a new challenge to the industry, said United's general manager John Willson.

The advertising and promotional campaign is being launched in the face of a new challenge from an online transtasman direct booking service expected to be announced shortly by Air New Zealand.

But, rather than fearing lost business from the new online booking service, United Travel is hoping to win new customers by highlighting the added value of using its travel services.

Willson said the prospect of lower airfares across the Tasman was "bound to attract more people to travel", which was good for everyone in the industry.

United's marketing push is part of a wider focus of travel agents to prove their worth to consumers by stressing their ability to get pricing deals from all the different airlines and travel wholesalers.

The charging of a fee by agents will become more common, as they seek to get paid by consumers rather than airlines.