“Outrageous”: Industry fires back at Air Canada commission cuts; ACTA “deeply concerned”

Canadian travel advisors and industry advocates are crying foul over a recent decision made by Air Canada to reduce – and, in some cases, eliminate – commissions amid “changing conditions” in the market.

On June 1, François Choquette, head of global sales at Air Canada, distributed a letter to agency partners, outlining a new commission structure that will take effect on July 1, 2026.

“The market environment in which we operate continues to evolve,” reads the letter, which PAX has viewed. “To adapt to these changing conditions and ensure the long-term strength of our business, we must adapt and adjust certain elements of our commercial model.”

A separate document that was shared with PAX by a reader outlines the changes, which include revisions to front-end commissions on North American bookings.

Air Canada’s commission rate for Business/Premium Economy (J, C, D, Z, P, O, E, A) has been reduced to three per cent (previously, it hovered between five to seven per cent, depending on the letter).

Economy (Y, B, M, U, H, Q, V, W, S, T, L, K, G) sits at three per cent; Economy Standard (classes with fare basis ending in TG) is at two per cent; Economy Basic (classes with fare basis ending in BA) is zero per cent; and Flight passes are at three per cent.

Perhaps the most significant reduction is the elimination of commission on group travel, which has been reduced to zero per cent.

Updated commission structures apply to South America, Transatlantic, Mainland China and Transpacific bookings as well.

“Outrageous” actions 

One travel advisor affected by the changes, who spoke to PAX on the condition of anonymity, describes the reductions as “outrageous.”

“It's a big cut,” the advisor told PAX during video call Monday night (June 15). “To go down to three per cent on Business Class is really cheap and disgusting.”

Reducing commissions on group travel to zero per cent, in particular, will hit some agencies hard, the advisor went on to say.  

“Imagine an agency that has a few hundred people travelling…if they’re earning $25 a ticket [in commission], times a few hundred, it’s a lot. And that’s now gone.”

The advisor also argues that it’s unreasonable for Economy Standard to generate commissions only one percentage point lower than Business Class, “which costs five times more.”

The advisor, personally, predicts the cutbacks will result in $10,000-$20,000 in lost revenue for the year.

“The mood” among agencies, the advisor shared, is to push back. 

One approach the advisor is taking is to shift bookings, “in a measured way,” to other airlines to make up for the losses.  

“I can't stop Air Canada sales, but I can move some business,” the advisor said.

Service fees will also increase as a result. “We’ve already started this,” the advisor said.  “We have no choice.”

While it remains unclear whether the reductions are uniform across all agencies, as contract terms can vary, it appears “most” independently-owned travel agencies are affected by the cuts, the advisor told us, anecdotally.  

A second travel advisor PAX spoke to, who also requested anonymity, said “many agencies in the country will be reassessing their loyalty strategy” due to the reductions.

“A change this large from Air Canada is going to negatively affect sales for them,” the advisor wrote in an email.

Perks can’t replace lost income, advisor says 

The reductions come as rising jet fuel costs, driven by geopolitical conflicts in the Middle East, drastically reshape the global aviation industry.

Fuel costs have surged to more than twice what they were before the conflict in Iran began, prompting airlines to eliminate routes, end some seasonal service early, and implement surcharges.

In its letter to the trade, Air Canada doesn’t specifically cite fuel costs as the reason for reducing its commissions.

What it lists, however, are some of things the airline needs to fund, including new aircraft, premium products, its loyalty program and new destinations.

“They’re buying new planes. Why is this on the back of travel advisors?” asked the travel advisor PAX spoke to.

The letter also states Air Canada’s “proven track record of consistently compensating travel agencies fairly,” such as guaranteeing payments, not recalling commissions during COVID and other major disruptions, enhancing the benefits of its Circle of Excellence program, and launching an AC&Me program for agents.

“These actions reflect the value we place in your role and on our long-standing partnership,” the letter reads. “As market conditions continue to evolve, we look forward to building a sustainable future with our travel agency partner.”

The travel advisor PAX spoke to, however, does not consider the airline’s actions to carry sufficient weight.

“The soft benefits they crow about have very little value compared to the impact on commissions,” the advisor said.

Air Canada cites “high-cost pressures”

In a statement emailed to PAX on Tuesday morning (June 16), Air Canada spokesperson Peter Fitzpatrick confirmed that fuel costs are, indeed, a factor in the airline’s decision to reduce commissions.

But it’s not just that. Overall higher costs, rising market uncertainty, and the impact of new technology, including AI, are also part of today’s evolving environment, he said.

“We are under high-cost pressures,” Fitzpatrick wrote. “Adapting to these changes requires that we manage our costs accordingly. Given this, Air Canada has decided to review the way it pays commissions to agencies in Canada.”

The changes, he said, are part of a longer-term strategy that will be “accelerated due to the conditions we find ourselves in in 2026.”

PAX asked about the disproportionate burden the reductions place on travel agencies.

“We are very mindful of the pressures our partners in the travel industry are under,” Fitzpatrick wrote. “We feel these same pressures. Under the incentive model the industry has traditionally relied upon, agents receive a percentage of the fare paid by the customers in the form of a commission to travel agencies and agents.”

“That said, we are confident that for agencies under an agreement with us we offer a compelling incentive program.”

Air Canada also has “a long record” of working with agency partners during difficult times, such as during COVID, Fitzpatrick noted.

“We have launched new programs such as AC&Me to find new ways to recognize their contributions,” he said. “We will continue to work with and find innovative ways to support and compensate our agency partners.”

As for the investments Air Canada is making (in new aircraft, for example), these are things that “benefit everyone,” Fitzpatrick said,  

“They ensure agents have the best-in-market products to offer their customers,” he said. “This makes it easier for agents to retain their customers and attract new ones.”

“Having the best product available for sale is key to the long-term success of the agents and our airline. It is an investment in their business as well as our own.”

Air Canada’s “ambition” for its next phase of growth is to be in the top 10 airlines in the world, Fitzpatrick said.

“We provide premium services, on premium routes, with frequency and non-stop services, and we reward agencies for selling our key unique selling features,” he said.

“We are reorganizing our business”

Air Canada’s New Frontiers 2030 strategic growth plan also means “we are reorganizing our business,” Fitzpatrick added.

Other cost-saving measures that have been made in recent years include the reduction in management headcounts, as was reported in 2025.

“We have repeatedly told the financial market, controlling our costs is a top priority as we also grow and invest in our airline,” said Fitzpatrick.

“With our Q1 results, we suspended financial guidance for the full year. We have also been clear that we can only recoup 50-60 per cent of the additional fuel costs for the second quarter.”

“Our cost of sales through agencies is growing faster than our revenue gain, which is not sustainable. Against this background, we have made the conscious decision to accelerate that rate review in 2026.”

PAX asked how much annual cost savings Air Canada expects to realize from the commission reductions, but the airline declined to comment as it does not disclose that type of information. 

The airline also wasn’t able to confirm if whether the reductions would be permanent or temporary.

“We cannot speculate on the future. But we will continue to evolve and adapt with the market,” said Fitzpatrick.

The travel advisor PAX spoke to said Air Canada’s move is only fuelling the “ghettoization” of travel professionals. 

“Over the years, wages for travel agents have not kept up,” the advisor said. “They're highly skilled, totally undervalued, and they're not paid nearly what they should be paid for learning as much as they have.”

Periods of market instability and economic downturns should be a signal for airlines to increase commissions – not reduce them, the advisor suggested.

“I believe Air Canada could increase commissions, strategically, and be more profitable. Not less profitable,” the advisor said. “If you pay a bit more, you might get more back.”

“These reductions are substantial,” says ACTA 

The Association of Canadian Travel Agencies and Travel Advisors (ACTA), meanwhile, says it is “deeply concerned and disappointed” in Air Canada for reducing commissions and compensation for advisors. 

“While ACTA has no visibility into the commercial agreements between Air Canada and individual agencies, the feedback we are receiving from members across the country is clear: these reductions are substantial and will have a meaningful impact on many travel businesses,” wrote Suzanne Acton-Gervais, president of ACTA, in a statement to PAX on Tuesday.

The timing and implementation of the decision have also raised concerns.

“Announced immediately following Travel Advisor Appreciation Month and with a short transition period, the changes came as a surprise to many agencies that have already made business, staffing and investment decisions based on existing arrangements,” said Acton-Gervais.

“Travel advisors generate significant revenue for airlines and provide essential support to travellers before, during and after their trips—particularly when disruptions occur and travellers need professional guidance and assistance.”

“At a time when travel has become increasingly complex, the role of the travel advisor has never been more important.”

More than a commission debate

Acton-Gervais says ACTA has met with Air Canada on “two occasions” to formally communicate its concerns to the airline’s executive leadership team.

The association has also raised the issue with the federal government “given its implications for consumers, entrepreneurs, small businesses and the broader travel economy.”

“We recognize the longstanding relationship between Air Canada and the travel agency community and remain hopeful that the airline will carefully consider the concerns being raised across the industry,” said Acton-Gervais.

“The strength of the response reflects the importance of this issue to thousands of Canadian travel businesses and the travellers they serve.”

It’s not simply a discussion about commissions, Acton-Gervais said.  

“It is a discussion about the value of professional travel advice, and the role travel advisors play in generating revenue, supporting consumers and strengthening Canada’s travel industry,” she said.

“Travel advisors are trusted partners in the travel ecosystem, and their contribution deserves to be recognized and fairly valued.”

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