Air Canada changes commission structure, adds GDS earning opportunities

Air Canada has made changes to its Domestic Canada Cash Rewards program that include new rates on Tango, Flex, Latitude and Business Class bookings, in addition to the ability to earn commission for Domestic itineraries booked in the GDS.

Effective March 4, 2015 with an outbound travel date of April 1, new Cash Rewards for bookings made via web and GDS are four per cent on Flex, Latitude and Business Class/Premium rouge fares, and zero per cent on Tango fares. This compares to the previous structure of seven per cent on web bookings for Tango, Flex and Latitude fares, plus five per cent on Business Class bookings.

Commissions have not previously been available for these GDS bookings.

"The fact of the matter is that this program, for a large part, didn't deliver the type of return we were looking for," said Duncan Bureau, Air Canada's vice-president, global sales, in an interview with PAX. "From a business structure, it's not something we can continue because it's driving a negative margin and in fact, creating a loss within that compensation model. Air Canada needs to be healthy and profitable, and we need to be in a position where that profit is sustainable in order for us to work with the travel trade in a healthy and logical manner, and we believe this program does that."

Additional enhancements have been made to the commission program for Air Canada's Preferred Travel Partner network, according to Sue Clements, director of agency sales, in an effort to recognize and reward agency support for "quality revenue," which they consider to be Flex fares and above.

"Overall for these agencies on our program, there is enhanced opportunity to make some very interesting dollars with Air Canada in the future," she said.

Recognizing that some partners will be disappointed in the adjustments, Bureau told PAX that the decision was made after long-term monitoring of results and frequent consultation with travel partners.

"We know and we respect that some people will make business decisions that are appropriate for their business, and we're fully prepared for that," he said. "At the same time, we have to make sure that Air Canada is in a position to be profitable moving forward."

"There are two things we're hoping to accomplish with this," he continued. "One is obviously we need to ensure that Air Canada is a going concern and generates profit... The second is that we want to make sure our partners have an opportunity to earn for the type of business they bring to the table; we want to reward those types of businesses that generate benefit for the organization."