For decades, airlines relied on an irreplaceable partner: travel agents. Agents provide clients with the connections, expertise, and advice needed to plan their travel while airlines provided agents with exclusive commissions and discounts. The partnership allowed both entities to thrive.
However, due to the advent of the OTAs, increasing airline competition, and changes in incentives programs and commissions, the equation has changed unfavorably and agent loyalty began to decline.
What is fueling the desire to rebuild the agent – airline relationship? Let’s take a look.
The Need for a Strong Relationship
Airlines and travel agents still depend on each other. Agents need to interact with airlines to book tickets for their clients. Despite the rise of OTAs and other challenges, airlines receive a sizeable number of ticketed passengers through agents.
In fact, Roger Black, president of the Travel Leaders Franchise Group, explained that high-end agencies are responsible for selling high-yield tickets to their clients. Airlines see a great ROI on these purchases thanks to fewer override commissions.
Strengthening the Airline-Agent Relationship
Given that both parties can benefit from a stronger relationship, it’s time for airlines to take the initiative. Here are some ways they can move forward:
- Accurate and Timely Incentives: It’s important for airlines to ensure they are able to provide accurate and timely incentives to agents. This calls for automation in the incentives processes. Current processes, such as Agent debit memos (ADMs) aren’t always accurate when a ticket is purchased. Furthermore, manual reconciliation processes can open up room for error in the payouts agents receive.
- Access to Instant and Accurate Sales Data: Airlines need to provide agents with accurate, up-to-date sales data. This allows them to book the best flights for their clients by taking into consideration more than price. With airlines turning to revenue-based FFP programs, access to sales data is more important than ever.
- Improved Incentive Programs: Airlines should re-evaluate their current incentive programs to ensure their partner agents are being properly rewarded for their work. This means offering the right incentive to the right agent at the right time. Airlines can identify which agents are delivering at high levels. They can also map agents based on their potential to sell or on their past performance. This helps paint a clear picture of which agents to create incentive programs for. The absence of this may cause agents to lose faith in the airlines running the program, which could result in lost loyalty.
- Spot Incentives: Airlines could also go further in their programs by providing on-the-spot incentives for achieving special targets, such as lump sum bonuses and recognition. These programs can help motivate agents to work toward these goals, helping to align their efforts with the airline’s financial goals.
Despite the state of the airline-agent relationship today, there are ways for airlines to strengthen this valuable partnership. Agents are still in a unique position to provide airlines with the competitive edge. By devising the right programs and providing a level of transparency, airlines can retain the loyalty of their agents.