Medview Airlines offers commission to travel agents

*Meet trade partners in Accra

*To begin Dubai route in July

Nigeria’s flag carrier airline, Medview Airline has re-introduced tickets sales commission to travel agents who sell its ticket on its entire routes network.

The disclosure was made by a top official of the airline, Capt. Godffrey Ogbogu, who represented the Managing Director, Alhaji Muneer Bankole when the airline met with its trade partners at the Nigeria High Commission in Accra, Ghana which culminated in the switching on of its Billing Settlement Plan (BSP).

Ogbogu stated that the company has decided to offer five per cent commission to agents for sale of its domestic/regional tickets while for the sale of each international flight ticket, they are entitled to nine per cent. The offer drew applause from the agents who expressed satisfaction with the airline’s operations, describing it as the fastest growing carrier in West Africa.

He stated that the gesture was in recognition of the loyalty of their trade partners to further encourage them to do business with them, describing their relationship as a win-win situation.

He described the forum as a milestone, just as he seized the opportunity to unfold route expansion programme of the firm, adding that Medview would take delivery of more airplanes as it plans to begin Dakar, Dubai, Singapore and Freetown routes among others.

His words, “Presently, the route we are looking at is Dubai. We have almost concluded arrangement to begin the Dubai route in July. We are getting more aircraft for Dubai and other destinations. We intend to do four times weekly flights to Dubai. Another route we are looking at is Freetown and Dakar.”

The liberalisation of the airline industry, growing competition, falling yields and high operating costs over the years forced airlines to rethink their business model and take step to reduce costs. In the process, travel agencies that historically have played an important role in the airline product distribution and sales have become a casualty.

Airlines in the last two decades have either reduced agents’ commission or eliminated it altogether to minimising travel intermediaries cost component on their overall costs.

Worried by the situation, a former Director-General of the Nigeria Civil Aviation Authority (NCAA), Dr. Harold Demuren frowned at the decision of foreign carriers operating to Nigeria to stop payment of commission to travel agents. He however lost the battle as the carriers maintained their position on it till today.

Some travel agents have changed their business model from commission-based order taking entities to service fee-based travel management businesses.

By cutting agents commission, airlines reduce their dependence on travel agencies as a distribution channel. This has become possible because of the wide spread availability and use of the internet to distribute airlines products. Besides the lower cost of internet distribution, travel information which hitherto was in the possession of airlines and travel agents is now readily available on the web and accessible to everyone.

Today, airlines do not fear that travel agents will boycott the distribution of their product since alternatives are available through the airlines offices and the internet.

According to a survey conducted by Amadeus, 34% of travel agencies consider reduced revenue from commission as their biggest challenge. In fact, the decision by airlines to reduce or eliminate commission has compelled many travel agencies to use technology and web-based sales systems to stay in business.

Wole Shadare