Travel agency stocks drop as Qantas plans to slash commissions
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Investors in ASX travel agency stocks aren’t reacting well to Qantas’ (ASX:QAN) planned cuts to commissions on international bookings.
Australia’s flag carrier released a market update in which it announced more initiatives to minimise cash burn including a two year wage freeze to the next round of enterprise agreements.
It also announced it would lower front-end commissions paid to travel agents on international tickets from 5 per cent to 1 per cent.
Qantas shares, which have been under siege in recent weeks saw a rebound.
Qantas won’t make these changes until July 2022, a move it says will give the industry time to adapt.
It also said that travel agents remained an important partner and Qantas would “work with them on broader revenue opportunities, particularly through technology”.
None of the companies have yet commented on the changes although Webjet (ASX:WEB) released financial results only yesterday.
After notching up $3 billion in Total Transaction Value (TTV) and $266 million in revenue in FY20, it only made $453 million in TTV and $38.5 million in revenue in the first 9 months of FY21.
Webjet declined to speak about these changes when contacted by Stockhead for comment this afternoon.
One industry player that has commented is the Australian Federation of Travel Agents (AFTA) which said it was “very disappointed”.
“The reality of COVID and the ongoing paralysis of international travel until at least mid-2022 puts Australia’s travel agents and businesses in a very difficult position – and this is another unwelcome blow,” it said.