Re: zero base commissions globally

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Appreciate your comments Addison,

<It is fascinating to watch supplier desperation to maintain control on a business model that no longer works very well.>

It was even more fascinating to watch LH go to zero base commission the same week they blitzed major corp customers and upped their discounts.  Net dollars collected are not increasing -- the shift seems only to be who is getting dollars back and for what.

When large corporate deals on major carriers (yup, major carriers) touch or exceed 50% (yup, fifty percent) off Coach, Business and First Class fares, you kind of wonder if the carriers are aware that they may be trading a frying pan for a frying pan.  Not that I disagree that their business model isn't a little dysfunctional -- it's just that they can't get out of "dysfunction" mode, whether discounting back-endedly to a reseller or front-endedly to a customer.  End result: higher fares for the regular customer without clout (not the once-a-year vacationer, but the small private companies which make up 85% of US GNP)

Whether they "compete" openly for agency favor (which no longer works) or discreetly for sweetheart deals (which are expensive and garner only nebulous loyalty) they seem only to play the "dollars off" game.  Ya' can't sell wholesale for ever and always, regardless of who your "reseller" is.

(name withheld, as always, to protect my job)



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