Spanish travel agents could hit Iberia for 800 million euros

MORE than 4'000 travel agencies across Spain could legally claim nearly 800 million euros from the Spanish National Carrier, Iberia.
The airline is planning to modify the agreement currently in place whereby travel agents are paid on a commission basis for the client reservations they secure for air travel with Iberia. The new system governing its commercial relations would impose a “zero commission” on the agencies. According to a communiqué released by the Association of Spanish Travel Agencies (CAAVE), as of 2004, the airline company will seek to terminate the present contractual relationship between both parties, consisting of a system of commissions detailed under the Agency Contract Law of 1992. The secretary general of CAAVE, Félix Arévalo, explained in the communiqué that the agencies are denouncing financial loss which would result from the application of the zero commission or “net tariff”. Such a system “would affect the essence of the contractual relationship traditionally enjoyed by Iberia and travel agents”. Arévalo clarified that the agencies “could lose their legal status as professional intermediaries and instead become agents of their clients, a situation that could shift responsibility away from the airline company in cases such as “overbooking” or flight delays. In the communiqué, CAAVE explained that Iberia is looking to dispense with the commissions that are currently paid to travel agents as acting intermediaries between the carrier and the client, “commissions that don't affect the price of the airline tickets”. “Nevertheless, with the new arrangement in place, the travel agents would then have the work of passing on the cost of this commission direct to the consumer”, he added. Faced with this situation, CAAVE “sees itself obliged” to recommend to the agencies that they set in motion the necessary legal procedure and reclaim sums due to them in the event of termination of the present contract. CAAVE also warns that there is a second legal channel to stop Iberia applying its “net tariff”. The International Association of Air Transport (IATA) stipulates that the travel agencies must be paid by the airlines. The travel agency sector in Spain, in which 42'000 people are employed, manage 85 per cent of Iberia's ticket sales.