Changes at WestJet will see the elimination of commission on domestic and transborder Econo fares, set to take effect Oct. 1, 2015.
These routes will also move from the standard seven per cent commission on all fares to a fare-bundle commission of four per cent on Flex bookings and an increase to eight per cent on Plus bookings.
Travel industry professionals across the country were bracing for news from the airline following Air Canada's move earlier this month to eliminate the seven per cent commission on Tango bookings and reduce commission on all other fare types to four per cent.
"After assessing where we want to go with our pricing, we have made the difficult decision to follow a major competitor in their approach to no-frills fares, in this case by changing the commission structure," said Lyell Farquharson, WestJet vice-president, sales. "As new competitors come to market, we anticipate they will follow the global trend in the ultra-low-cost carrier category where no-frills fares are offered without commission."
The new commission structure at WestJet will be synonymous across various booking channels, specifically its travel agent website, WestJet Direct (API) and the global distribution system.
WestJet Vacations' base commissions of eight per cent on a true-base package price and WestJet groups commissions at five per cent on all group fares remain unchanged. According to the airline, "Fares may be combined and the higher commission rate will be paid out on the full booking."
In addition, all fares on international flights retain the seven per cent base commission on Econo fares and Flex fares, though will see an increase to eight per cent on Plus fares.
"We are discouraged to learn that those agents who deal with a large percentage of customers whose focus is Econo fares will have to come up with a plan to up sell and if they don't, will see a drop in their agent revenue from WestJet," ACTA President David McCaig told PAX in a statement. However, he points out that having commissionable fares available for booking on the GDS "is a good thing for the travel agent Industry."
"It shows that the airline is invested in the GDS to drive bookings and that the GDS very much has a future in travel," he said. "When using a GDS remember to always refine your search to ask for 'highest commission' and continue to charge service fees. We are worth it."
Air Canada and WestJet have a history of following suit when it comes to commission adjustments. In 2009, WestJet cut its commission to four per cent from nine per cent, and Air Canada responded by introducing a four per cent commission on Tango fares, which previously, was zero. Shortly thereafter, both then moved to seven per cent pay-outs.
WestJet has provided a breakdown of the new commission structure, in addition to an FAQ, which can be found by clicking here.
** This article has been updated from its original version.