Booking fees set to increase cost of travel
10 February 2006

New Zealanders heading overseas are facing increased booking fees of up to $200 for international flights as travel agents try to make up for lower commissions from airlines. Lost revenue from many airlines that dropped their commission to agents from about 9 per cent to 4 per cent or less has prompted the move.

"Welcome to the world of fees," said Fiona Yaxley, director of Capital Travel in Wellington. "They've dropped our commission, so we're not getting paid by anyone but the client." She said Capital Travel now charged $60 for each one-way international long-haul flight, and fees could be added for complicated around-the-world flights, taking the total nearer to $200.
Air New Zealand spokeswoman Pam Wong confirmed the airline dropped its commission for international flights from 9 per cent to 4 per cent in January. She said the move was in line with a global trend of airlines decreasing sales costs. "There are other ways to purchase tickets, so this is just one area," she said. A Qantas spokeswoman said the airline would decrease its commission for international long-haul sales in New Zealand from 9 per cent to 4 per cent in May.

Flight Centre communications manager John Guinness said the company was looking at increasing its booking fees, but fees depended on the circumstances of the booking and its complexity. Michael Loft, sales and marketing manager for TQ3navigant corporate travel agencies, said all its customers would face some kind of fee increase to deal with the commission drop. For smaller businesses, this would be a fee of $50 for a one-way, long-haul international flight, with additional costs for complicated bookings. Big businesses could negotiate a transaction or management fee.

House of Travel retail director Brent Thomas said the company did not charge a flat fee. "The approach we take is similar to that of other retailers with a retail margin. The level of that margin is not fixed as it depends very much on where the customer is travelling, on what airline, the type of seat class they are travelling on and where they are stopping off," Thomas said. "Every time we have a conversation with an airline and there are changes, we have to adapt to that."

A Commerce Commission spokeswoman said it had not received any complaints about the matter. In November, the Commerce Commission won a legal case against Air New Zealand in the Auckland District Court. The decision forced the airline to show the full price of flights in advertisements after they had previously excluded fuel surcharges.