News of Air Canada’s commission cut has hit the consumer press – with advocacy groups ACTA and ACITA highlighting how Air Canada’s move will negatively impact travel advisors.

As reported earlier, Air Canada’s commission cut takes effect July 1. Travel advisors said they are angry, frustrated and disappointed with Air Canada’s decision.

“While the impact will vary by business, some members have indicated that the changes could have serious implications for the long-term viability of their agencies, particularly where Air Canada represents a substantial portion of their sales,” said ACTA President Suzanne Acton-Gervais, adding that ACTA’s thousands of members could see a loss of about a quarter of Air Canada-related revenue as a result.

ACITA co-founder Brenda Slater said many advisors have seen Air Canada commissions cut in half to about 4% or 5%, and sometimes lower.

“For them to basically say, well, now we’re only going to give you 3% is a little bit of a smack,” said Slater.

In its statement last week Air Canada said it will recoup 50-60% of its higher energy costs in Q2. Higher costs overall, rising market uncertainty and the advent of artificial intelligence are also at play, said the carrier.

Air Canada spokesperson Peter Fitzpatrick said the airline could not speculate on whether commission rates might rise as fuel prices come back down.

Slater warned of potential unexpected consequences for Air Canada.

“They need to be aware that travel advisors are watching and very careful to pick the suppliers based on who’s going to service our clients the best — and who also is going to support us the best,” she said.

“If they’re not going to do that, that’s their choice. But we also have choices.”

While easing tensions in the Middle East have had a positive effect on the price of oil, industry experts have warned that it could take months for airfares to come down, if at all. During United Airlines’ Q1 earnings call, EVP and Chief Commercial Officer, Andrew Nocella, said, “the longer consumers pay these prices and airlines get used to this revenue stream, the more likely it is to stick.”

Porter Airlines announced it is reducing its fuel surcharge, first announced in March, to $20 from $40 on new reward flight bookings for VIPorter members.

Acton-Gervais noted that the burden of lower commissions could fall disproportionately on certain demographics.

“Travel agencies and travel advisers are overwhelmingly small- and medium-sized businesses,” she said. “The majority of travel advisors are women.”

She and Slater sought to stress the value that professionals offer passengers in a world replete with travel disruptions, pointing to risk management and sheer accessibility compared with hard-to-reach customer service representatives at some carriers.

“Now, people are questioning these industry partnerships,” Slater said of her colleagues.

“We’re constantly being told that we’re an important partner to them, but it doesn’t seem that way.”

Source: Travelweek With file from The Canadian Press