Southern Africa’s Travel News Weekly
August 12 2009 I No. 2070
INSIDE
TRAVEL NEWS WEEKLY
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News
feature
‘Staycations’ SA pax travel closer to home Page 6
news
sensational south america
La mercy airport Expensive white elephant?
Affordable & accessible Page 8
Page 7
Renegotiate! SA travel agents should consider renegotiating their overrides and incentives as BSP figures plummet, reports Melody Brandon
T
RAVEL agents in South Africa could follow the lead of their US counterparts, who are renegotiating their sales targets with preferred suppliers due to weakened demand and price discounting. American agents have taken a proactive approach to preferred agreements, renegotiating their deals as early as the first quarter of 2009. With BSP figures dropping massively in South Africa, agent sales are taking a knock leaving agents unable to achieve sales targets and overrides. Iata’s latest international scheduled traffic results show passenger demand dropped by 7,2%, compared with the same month the previous year. Said Giovanni Bisignani, Iata dg and ceo: “Airlines are seeing international revenue falls of up to 30% at the start of the busy JuneAugust period when airlines traditionally make their money. The outlook remains bleak.” In SA, BSP figures for the first quarter were down
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23%, while in the second quarter they were 31% down compared with the same periods the previous year.
Tight-lipped
While airlines operating into South Africa are tight-lipped about the specifics of their renegotiations, they recognise the need to look after their preferred agreements.
“We cannot ignore the current crisis and the effects it has on the market.” Lufthansa and Swiss International Air Lines say they see preferred agent agreements as an integral part of their professional relationship forged over many years with agents. “We cannot ignore the current crisis and the effects it has on the market. Our fundamental understanding of working together is to analyse the situation and to find adequate solutions. Lufthansa and Swiss are in regular dialogue with their preferred agents and have also now developed and
implemented solutions,” said Gabriel Leupold, md Southern and Eastern Africa for Lufthansa and Swiss. Delta Air Lines told TNW it was “working closely” with agents. “The information is sensitive for competitive reasons, but we continue to work closely with the trade in South Africa in a competitive environment,” explained Jimmy Eichelgruen, sales director: Africa, the Middle East and India. While in theory renegotiation may seem the only option, issues around preferred supplier agreements and anticompetitive behaviour have shrouded the issue in secrecy. Holiday Tours md, Otto de Vries, warned that negotiations with airlines would not be as easy as agents would hope. “I think that generally airlines may be anticipating an upturn in the next year. If the override target was to be reduced dramatically, they (airlines) would lose out tremendously if there was an upturn. I think it would be easier for agents to To page 12
Mombasa mad! Kenya Airways is increasing its Nairoboi-Mombasa schedule from 27 to 58 flights a week using a B767300ER aircraft to serve the high-frequency route on Wednesdays and weekends. The airline is also gearing up to launch three weekly flights to Gaborone on September 3. The connections for South Africans with Kenya Airways’ three daily flights from Johannesburg mean Mombasa is now closer than ever, say (from left) Bathi Pendu, ticketing agent; Melissa Dolby, sales executive and Edith Tabane, reservations Photo: Tijana Huysamen
EK’s next fare hike angers agents Jeanette Phillips FOLLOWING its 10% fare increase in July, Emirates has again increased fares by up to 5% to all destinations in all classes from August 4. In July, Emirates regional manager Southern Africa, Fouad Caunhye, defended the airline’s decision to increase fares by saying
Emirates was implementing more realistic total prices for any journey in an effort to stabilise the industry as a whole (TNW, July 1 2009). Agents have reacted angrily to the announcement. R&M Global Travel Service consultant Jan Levitan said she believed more airlines would follow suit. “As most people To page 2