SQ & Flight Centre Australia

[KeithMEL]

e.g. contacts within the airlines to try and clear waitlists/open up availability (airline status sometimes can only go so far). This can involve constant chasing/checking taking up a lot of the TA's time.

Further to this - I recently learnt that airlines run loyalty programs for TAs as well. The more revenue TAs send to a particular airline, the more 'influence' they have over things like waitlist clearance.

[trekkie]

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[trekkie]

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[jhm]

As a more concrete example, I bought last year a ticket with about half a dozen segments including the following:

...-SIN-(SQ F)-BKK-(TG F)-NRT-(NH F)-LAX-...

for (if I remember correctly) around EUR 1,100 inclusive of taxes, charges and TA's booking fee. (The fare is no longer available.) Try booking that by yourself!

[jhm]

not necessary true. Im aware of at least 1 TA on flyertalk who mainly deals with delta and "bao to" on us or told delta of the few low/mistake fares on flyertalk. And this TA has posted openly that he/she did it to protect their relationship with delta. You just have to be careful which TA you use.

Exactly. I know who you mean on FT.

[zvezda]

I'm sure commissions are at the heart of this dispute. In the 20th century, large corporate travel agencies provided consumers with a valuable service. Now, in about 99% of case, that service has been rendered redundant be the Internet. Still, there are some small travel agencies and self-employed travel agents out there providing very valuable services to passengers flying on complex itineraries.

[KeithMEL]

Seems like it's not simply a problem with SQ now:

http://www.theaustralian.news.com.au...-23349,00.html

Flight Centre to punish airlines that undercut it

Steve Creedy | May 27, 2009

TRAVEL chain Flight Centre has threatened to punish airlines that undercut it on the internet.

The threat is contained in a March newsletter, Skroo News, sent to Flight Centre managers by the chain's managing director, Graham "Skroo" Turner.

The newsletter warns that any airline that does not agree to the company's demands will be dropped and it asks for staff co-operation "to make these stop-sell situations work and really hurt recalcitrant airlines".

"Again, these poor economic times give us a chance to get at and punish those carriers (only one or two) who are trying to undercut us on the web, thus costing us in price beats," the newsletter says, referring to Flight Centre's policy to beat any cheaper available price.

It names Malaysia Airlines and a possible Middle Eastern carrier as potential targets.

The email has emerged at a time when Flight Centre is involved in an acrimonious dispute with Singapore Airlines about incentive payments -- part of a deal that gives Singapore preferred status.

It is understood Flight Centre wants to double the payments -- which are above the standard commission Singapore pays all travel agents and normally tied to sales targets -- to 8 per cent.

Flight Centre spokesman Haydn Long said last night that the argument about airlines undercutting travel agents had been going on for some years.

"The reality is the airlines need our business at the moment; most of them are losing money," he said.

"Some haven't been paying properly for the millions of dollars worth of sales that we generate each year."

[Chris]

good on them.

and yes, working relationships with the various airlines does really help.

[UMD]

Isn't the same thing happening with SQ and TAs in India as well? I believe SQ is still being boycotted by TAs in India.

Hope this fallout with TAs can be resolved soon.

[Singapore_Air]

a single digit.

It's 5%.

[Kiwi]

Sabre is majority owned by SQ, the last i am aware.

I don't think so.

[trekkie]

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[huaiwei]

i can confirm that all the rumours on this issue is mostly likely originating from flight centre.

SQ essentially renogiated all its contracts with Australian based TAs. Normally on downturns, TAs have a more dominant power in airline ticket sales compared to airlines. What SQ is doing is forcing all the TAs to adopt its sales model. From current negotiations to go from nett price to gross prices, revenues from SQ to TAs will fall from double digit million dollars to single digit million dollar deals. Given the business model of Flight centre, such moves from SQ will likely affect flight centre more than other TAs.

The smart thing for these TAs to do actually is not sell SQ tickets for a period and SQ will likely cave in than eat up the losses. It would benefit consumers if SQ realise and make concrete efforts to show it has to cave in to market expectations.

profit figures from SQ is likely to originate from cost cutting than from sales revenue.

I fail to see how this should benefit consumers, considering that the whole arrangement with TAs means SQ's inability to cut costs and there will be higher ticket costs to begin with.

So for the real benefit of consumers, I hope the TAs get screwed and that SQ will stick to its guns, just like what it is doing in India. TAs owe their survival to airlines, not the other way round, and its high time they be put in their places.

[stargold]

The smart thing for these TAs to do actually is not sell SQ tickets for a period and SQ will likely cave in than eat up the losses. It would benefit consumers if SQ realise and make concrete efforts to show it has to cave in to market expectations.

You're assuming that the only way people buy SQ tickets is through travel agents. If people know enough to ask for SQ specifically, they will also be able to log onto the SQ website if the TA refuses to sell SQ tickets.

The reason why we're having this discussion in the first place is because the role of the travel agent for simple flight bookings has become redundant. Having the corporate equivalent of a throw-toys-out-of-pram tantrum is not going to reverse the fact that airlines can now accept as many bookings as it wants through its own website with hardly any human intervention, thereby no longer needing the role of the travel agent.

What do you do with an employee who can only perform one particular task that you no longer require because technology has moved on? That's right, you make him redundant. Why should SQ keep paying over the odds to these travel agents for doing a task that is perfectly easily done on SQ's own website? Out of the kindness of their heart?

Also, this is no doubt a long-term plan towards the elimination of the commission structure. I doubt that SQ will be that easily swayed - look at the Indian market. No sign of SQ caving in just yet.

[trekkie]

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