IN AN effort to tackle
transparent pricing, Asata
voted at its annual AGM in
2015 that its members should
submit chartered/audited
accountant reports that
include special-purpose audits
(see TNW October 7). Almost
two years later, agents are still
without any regulation on the
matter, leaving the door open
for TMCs to engage in shady
pricing.
Ceo of Asata, Otto de Vries,
says the audit reports were to
ensure that a TMC that had a
commercial agreement where
there was an expectation of
transparency, was complying
with it. Now, Asata will
request audit reports as
and when necessary.
Although the Consumer
Protection Act is used by
Asata as best practice, it
does not apply to the majority
of Asata’s members, says
Otto. The CPA does not apply
to the supply of goods and/
or services to the State
or companies with annual
turnover or asset value in
excess of R2m, he says.
The CPA dictates that, thirdparty
charges, such as airport
taxes, cannot be marked up,
but the Act also does not
require intermediaries to be
transparent about their profit,
says Otto.
He also says selling a
lower class ticket as a higher
fare, where the conditions of
the ticket do not match the
conditions that the customer
requested, is illegal.
But industry experts say the
loose ends on this issue keep
the industry at risk of dodgy
behaviour. Mladen Lukic, gm
of Travel Counsellors SA, asks:
“What actually constitutes
marking-up?” Although the CPA
does not allow the marking-up
of taxes, if there is no clear
contract or understanding
between the client and TMC
on ticket pricing, who is to say
that the agency isn’t hiding its
fees in the taxes of the fare?”
He says agents should
always be transparent and
TMCs are entitled to price the
value of their services. But
the problem arises when a
TMC quotes a fare and falsely
represents the ticket price by
saying “the ticket price is
R16 000” as opposed to
“my cost to issue you the
ticket is R16 000,” he says.
Md of Flight Centre
Travel Group, Andrew
Stark, says the TMC’s
business model dictates
the level of transparency
expected. He says FCTG’s
leisure division is a retail
environment and that
whether a margin is added
to the airfare is dependent
on “which campaign the
business is running that
week or month”. He says
FCTG divides its corporate
business into services for
SMEs and services for large
corporates. “Flight Centre
Business Traveller and
Corporate Traveller (aimed
at SMEs) both operate like
leisure businesses which
are wrapped in a corporate
offering. With this business,
service fees and contracts
are tailor-made. Whereas
with the large corporates,
serviced by FCM for example,
business is much more
transparent as that is tied in
with the contract.”
Once the industry is
regulated, we’d be able to
police these things far better,
adds Andrew.
Jonathan Gerber, ceo of
TAG, says where there is
no formal contract in place
“the client is either happy to
pay the total price or not”.
But where there is a formal
contract and the claim is
that the service fee is the
only charge, when actually
the TMC is marking up fares,
this would be tantamount to
deception, he says.
Chairman of the GBTA,
Howard Stephens,
says corporates expect
transparency, and fees or
commissions should be
disclosed to the client. He
says corporates also have a
responsibility to check their
contracts and if there are any
discrepancies, corporates
should confront the TMC.
Meanwhile, both Amadeus
and Travelport offer solutions
that allow agents to make
discretionary mark-ups.
“We do offer a product
called Net Fare Manager,
which enables the TMC to
mark up nett fares filed
with the relevant airline’s
authority, and it’s completely
transparent,” says Siobhan
McCarthy, senior manager,
Corporate Communications,
Africa of Travelport.
“The onus is on the
travel agent to decide
how they wish to use
that technology and how
they wish to charge their
customers,” an Amadeus
spokesperson said.
