Travel agents angered by BA selling cut-price fares
Saturday 19 June 1999
The carrier has set up its own "bucket shop", which advertises fares such as pounds 376 return from Gatwick to Denver or pounds 141 to Lyon. Many of these match fares currently sold on the open market by British Airways as "World Offers". But in the past week the carrier's in-house discount agency has been selling some tickets at rates below those available to conventional travel agents.
The discount agency, called Travel Options, is a trading division of British Airways Holidays, itself a wholly owned subsidiary of BA. In national newspaper advertisements last weekend, it quoted a return fare to Kuala Lumpur of pounds 434, compared with the official lowest BA price of pounds 578. London discount agents said that this reflected the rate at which BA sold tickets to the trade. In other words, to match Travel Options' fares, existing bucket shops would have to sell at cost.
Other destinations, in Europe and worldwide, were advertised at significant discounts to the airline's normal tariffs: for Cairo return, Travel Options quoted pounds 212, while the lowest fare sold by BA's telephone sales office is exactly pounds 200 more. The number of independent travellers buying long- haul tickets has risen ten-fold in the past 20 years, making the discount market an increasingly important element of an airline's sales.
Discounted fares have been a feature of aviation ever since the introduction of the Boeing 747 in the Seventies, which created the problem for an airline of how to fill more than twice the number of seats. A number of overseas carriers, from Air Malta to Japan Airlines, run their own London-based discount agents, but this is believed to be the first time that a UK-based airline has set up its own operation.
The move has infuriated existing discount agents, who fear that BA intends to poach many of their customers.
"At the moment I'm making pounds 25 a time on Australia bookings, which works out at less than four per cent profit margin," said one agent, who asked not to be identified. "BA seems to want to squeeze some blood out of a very dehydrated stone."
Colin Whaley, the British Airways Holidays executive responsible for the Travel Options offshoot, said the exercise was purely experimental. "The idea of Travel Options was to pick up on the fact that BA's published fares are very competitive," he said. The advertised prices that undercut these fares were "an anomaly" and would be withdrawn as from this weekend.
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