Wednesday, May 6, 2009

Delta Brings Back Agent Commissions - Really

Delta, the airline which in their last earnings call suggested that travel agents and OTAs should pay them for content, has apparently had a change of heart and decided to pay agents.

Travel Weekly is reporting that Delta is offering agents a 10% commission on all flights originating in the New York metro area (LGA, JFK, EWR, HPN and SWF) to Mexico, the Caribbean and Central/South America.

When was the last time we heard of a major US-based airline increasing commissions? Obviously, private back-end commissions and overrides have continued to be part of the landscape since the airlines reduced and ultimately cut back on commissions years ago. But we haven't seen a broad, shot-gun approach to the market like this, except maybe from the likes of Air India...

Agents need to book tickets by June 30th for travel until December 15th so DL is clearly targeting the softer summer(Northern Hemisphere, anyway) and fall periods.

Offering the bonus on routes to Mexico is clearly understandable but motivating people to travel who are scared is notoriously difficult - think post 9/11.

As for the other routes, clearly DL is seeing softness in one of the areas where they have recently added extensive new service. Since last December, Delta has added service to Bogota, Manaus, Fortaleza, Recife, Tegucigalpa and expanded service to Sao Paulo, Rio and Guayaquil. Granted, most of these routes are operated from Atlanta, but New York metro area is clearly a major feeder market for these flights. From New York, Delta operates nonstops to Sao Paulo, San Juan, Mexico City, Bogota and a host of other Caribbean islands.

But how ironic that Delta has gone from asking for payment from agents to paying them in a just a few short weeks.... and will the Caribbean/Latin market leader, American, react? And how will Delta's soon to be ex-partner across the Hudson, Continental (who also operates a huge route system into Latin America and Caribbean) react?

1 comment:

  1. I guess Delta's dream, as Langston Hughes might have put it, is a "dream deferred."