I was reading the following article, if you ask me it really seems like AC and Milton are really pushing Tango, and want Travel agents to book pax. on Tango, rather than mainline, all in order to hurt, or for that matter try to hurt, Westjet?
Although, it may just be another attempt to lower AC's costs, however, wont in increase Tango's operating costs aswell?
And, as I read earlier on this forum, it was said Tango's costs were low, but not that low.
Again, I am baffled by Air Canada's decisions.
TORONTO (CP) - Following the lead of U.S. airlines, Air Canada announced Friday it will eliminate most of the commissions it pays travel agents - a move expected to hit consumers in the pocket book. Starting on April 22, the Montreal-based airline will no longer pay travel agents commissions for tickets issued in Canada.
Effective immediately, it will stop paying commission on tickets sold in the U.S., Puerto Rico and the U.S. Virgin Islands for travel on the main Air Canada service or Air Canada Regional.
However, Air Canada will continue to pay commission on tickets issued for travel on Tango, its new no-frills service that's in direct competition with Calgary-based WestJet Airlines.
Louise Crandall, spokewoman for the Association of Canadian Travel Agents, said Air Canada's decision to follow the lead of the U.S. carriers will hurt travel agents and consumers alike.
"Air Canada is asking travel agents who book and deliver 70 to 80 per cent of their tickets to work for nothing," Crandall said from the industry group's headquarters in Ottawa.
Travel agencies will be forced to start or increase service fees for their customers to make up for the lost revenue, she said.
"In short, Air Canada is passing the cost of distribution of airline tickets onto the consumer," Crandall said.
Air Canada would like its customers to book flights using an online Web site or phoning one of its call centres directly, she added.
But that will do consumers a disservice because airlines want people to think there are only one or two fares available.
"In fact, if you called a travel agent you would find there are dozens of fares available. And only a travel agent would give you unbiased advice on options that, in the long and short term, would save the consumer money."
Air Canada refused to provide comment on the release issued Friday afternoon.
Prior to the changes announced Friday, the airline - which has about 80 per cent of the Canadian domestic airline market - paid travel agents a five per cent commission up to a maximum of $28 for a return ticket.
For Lesley Paull, who owns a 10-employee travel agency in Edmonton, those commissions accounted for about 40 per cent of overall revenues.
Like many agencies, which have long expected airlines to eventually stop paying commissions, Paull Travel also charges its corporate and individual clients a service fee.
Paull said she doesn't expect to lay off staff immediately because there's still the same amount of work to do to serve her clients. That might change, however, if clients aren't prepared to pay higher service fees that her agency will have to put in place.
"But I'm hoping we can work it out so it's beneficial for the customer and for us and we can all move forward so we don't have to deal with this again," Paull said.
Air Canada said it would continue to pay commissions for flights booked by travel agents on Tango, which is in stiff competition with WestJet.
Both WestJet and Tango pay up to nine per cent commission on flights booked using Web reservation systems, rather than the more costly computer reservation systems run by Sabre, Galileo/Apollo, Amadeus and Worldspan.
Air Canada said it will also continue its Horizons 2000 program, which provides bonus payments for agents that book high volumes of flights on its airlines.