CAL cost cutting slammed

| 11/03/2009

(CNS): Cayman Airways’ move to reduce travel agent commission next month from 10% per ticket sold to 6%, described by the airline as a “proactive operational cost-saving measure to help keep airfares as low as possible for customers”, has been heavily criticized by one travel agent, who says that move will backfire and end up losing money for the National Carrier because local agents will stop promoting it above other airlines.

A release from Cayman Airways notes that this new rate, effective 1 April, is still well above that which is currently being paid to local travel agents by competing airlines serving the Cayman Islands, and Cayman Airways CEO Designate Olson Anderson says this new structure aims to ensure that airfares remain affordable for travellers.

“For over a decade airlines worldwide have been reducing commission payments in order to reduce the cost of air travel,” Anderson said. “This new structure will ultimately benefit the customers that both Cayman Airways and local travel agents serve, and we look forward to continuing to work closely with our travel agent partners.”

However, one travel agent described the relationship between agents and the airline as “horrible and getting worse”, and said the change in commission was not discussed with tour operators beforehand. Preferring to remain anonymous because she didn’t want to make the relationship with the airline even worse, she said, “It used to be that when we had people call who didn’t know anything about Cayman Airways, I would say give CAL a chance. We pushed Cayman Airways more than any other airline, and now this is how they reward that loyalty.”

When Cayman Airways started making high-level personnel changes two years ago, including a change of CEO, the relationship with agents started to deteriorate, and it seems as if the airline is trying to squeeze them out with a move to web-based bookings, she said. In what appears to be a continuing trend, the commissions paid by airlines to travel industry agents on bookings have been decreasing over time, forcing the agencies to charge additional or increased service fees to the end customer for the convenience and service.

“Agents in Cayman have given Cayman Airways a lot of support over the years, and even the smaller companies generate several million for the local airline in ticket sales each year. Many agents would push the National Flag Carrier because of the higher commission and also out of loyalty. Unless the customer asked for another airline, I would always quote Cayman Airways first. Now, when people call, I just look for the cheapest airline and don’t worry about which one it is,” said the agent. “I think that they will lose a lot of money through this.”

She also noted that the airline doesn’t seem to have aclearance policy since former CEO Mike Adam left the airline. “If I found a cheap flight on another carrier, I would call CAL and see if they could match it because I really wanted to sell them. Then for the last couple of years they have just said to ‘take whatever’s in the system’ even when the flight had seats available.” However, the agent noted that over the last few weeks, they have started to work with individual CAL agents to clear seats again in some limited instances.

“It’s a shame that there isn’t a more progressive partnership,” the agent noted. “After all, a local airline needs local support, but this isn’t a one-way relationship. Hopefully this will improve before the local travel industry and the public have less choices and more expenses when traveling.”

 

 

Print Friendly, PDF & Email

Category: Business

Comments (15)

Trackback URL | Comments RSS Feed

  1. Anonymous says:

    Well, wake up –  many businesses are cutting back where they can.  Who would pay more for goods and services than necessary!?  No one!  You can’t go a day without reading about financial losses and redundancies around the globe and everyone is looking for a discount!!

  2. Frequent Flyer says:

    Oh Excellant!! So that means Cayman Airways fare will now reflect the 4% savings!!

    Yeah. Right. And monkeys will fly out of my … eyes.

    • Anonymous says:

      "Oh Excellant!! So that means Cayman Airways fare will now reflect the 4% savings!!"

      When they said they wanted to save costs, they meant CAL’s not yours!

  3. Anonymous says:

    I am a frequent user of Cayman Airways and have noted the following.  

    Using their web site for bookings is one of the hardest in the business.  Even though I have a frequent flyer account and am over 65, I usually cannot complete a bookings on line and must call an agent to complete the booking.  There was a time when Cayman Air had a business account office and it was very easy to make bookings and at a discounted price.

    As a member of Sir Turtle Club, I am not impressed with the perks that are offered.

    I understand that people flying to Cuba from Miami have switched to Mexicana Air because the Cayman Air price was too expensive.   Why?

    Cayman Air chose to fly to Dulles Airport in Washington DC.  Why?  The airport is not a hub and is not near the population that lives in the area.  Why not have the New York Flight stop in Baltimore?  There used to be direct service from Baltimore and it was usually full.  Baltimore is a hub for Southwest Air.

    The flight to Chicago, if it is not flying full, should make a stop before coming to Cayman.  

     

  4. Anonymous says:

    I suppose if everyone had the luxury of a computer then they could book online and pray that what they booked turned out to be real upon checkin. Or they could spend hours on the phone with each airline’s personnel trying to book multiple leg flights at the best price. The fact is that Travel Agencies serve a valuable role by providing clients with a quality service that the airlines cannot or have not done. This is reason for their very existence. Without them, it would be interesting to see how the travelling public would sort issues with flights and make travel arrangements in a timely, effient manner when the airline’s reservations resources are overwhelmed or there is a problem with their web based procedures. Have you ever tried to call an 800 number or to sort out any kind of flight problem with an airline’s personnel? No personalized service, put on hold for extended periods, no return calls.  It’s a nightmare!!!  

  5. budget traveller says:

    I applaude CAL for taking this step. The travel agent, by her own accord did not work to get the best price for her clients — rather — she pushed a service — apparently to get a higher commission! Shame on you Travel Agent for thinking of yourself and not your client!

    CAL says they  pay 6% commission, what do the other airlines pay local travel agents?? If it is lower than 6% — Why don’t you threaten to boycott them as well?!!

  6. Anonymous says:

    Well I must say, bout time local agents speak up.  I have been buying tickets from local travel agents for years.  Once I had to buy a ticket from the  counter and what a mess.  I stood there for hours while agent tried to book me on flights with the shortest delay and a good price.  To no avail they didn’t seem like they  knew how to use the system or knew what they were doing.   After about in hour or so, I decided to call a agent to see what he/she could do for me.  HELLO!!!! it took him/her about 10 minutes to get back to me with fares and flight schedule.  And guess what?????? The travel agent saved me $50.00 on the fare quoted by a CAL agent… Now is this what people want? I don’t think so………

  7. Anonymous says:

    Maybe a better way to cut costs would be to stop sponsoring every charity, fundraising event, etc. While I believe that every firm should do its part to be a good corporate citizen, I’ve always found it mind boggling that a company so deep in debt can sponsor every Tom, Dick and Harry that approaches them for funding. CAL’s decision to reduce travel agent commissions indicates a lack of vision on the part of management, not to mention an obvious cluelessness about how an economy works – the more you put into it, the more you get of it. Duh!

    • Anonymous says:

      "CAL’s decision to reduce travel agent commissions indicates a lack of vision on the part of management".

      Written by a travel agent no doubt.    

    • Anonymous says:

      I doubt very much that Cayman Airways sponsorship of community events and projects costs them very much at all. What they are in fact doing is putting butts in what would otherwise be empty seats in many cases by offering up "free" tickets as prizes. These "free"seats can only be used in limited numbers on each flight and not where flights will be potentially sold out. Good for you Cayman Airways, please keep supporting our community.

  8. Anonymous says:

    Fantastic idea!

  9. Anonymous says:

    If a move to focus on web based bookings means cheaper flights then of course its a good idea. Why pay a middleman to book flights for you?

    The fact that travel agents admit that they promote Cayman airways over any other airlines just because the commission is higher just re-iterates the fact that they are obviously not out to get the best deal for the customer but would push a more expensive flight because their commission would be higher.

    I’ve looked at using a travel agent before for a couple of recent trips but the prices they quoted for my trip were the same that I could have got myself by searching the internet and booking direct. Except of course the travel agents slap an extra $50 fee on top.

     

     

  10. Anonymous says:

    As with every other industry affected by the global economic doom, the airline industry is no exception to making cost-cutting decisions where possible. Travel agents should not be naive to think that they can continue to tread on their current commissions as a result. There are lean years and premium ones. Learn to plan accordingly and live with both. Cayman Airways is responding to the current economic situation to continue to remain operational under the circumstances.

  11. Anonymous says:

    This is a good idea, because Cayman Airways is the only Airlines that the tickets are so expensive. Good Idea stick to it and i guess it will bring the tourists back to the island by air, instead by ship.

    • Anonymous says:

      I never use a travel agent anyway, after being disappointed too many times. I just book my tickets online. I will go with whoevers cheapest, and if that happens to be Cayman Airways, then so be it.