Singapore Airlines and Flight Centre commercial impasse

[Jon Harris]

Just got a an email from SQ KrisFlyer stating:

''As a valued KrisFlyer member, I am writing to inform you that as a result of a commercial impasse with Flight Centre, Singapore Airlines airfares might not be available for purchase through Flight Centre retail outlets.

Singapore Airlines is still committed to giving our customers great value fares. Singapore Airlines has agreements in place with other major travel agents, and our flights can be booked as per normal through all other travel agency groups, or online at singaporeair.com.au

Thank you for your continued support. We look forward to welcoming you on board again soon.

With best wishes, "

Does anyone know what happened?

[Simon L.]

Well, it has now been publicly reported, so I think we can start talking about the matter

FLIGHT Centre has launched a "turn the screw on SQ" campaign against Singapore Airlines and stopped selling the carrier's tickets from its 800 outlets.

The row between one of the world's biggest airlines and the Queensland-based travel giant turned nasty after the SIA refused to pay the agency a commission of more than 5 per cent on ticket sales.

SIA told Flight Centre negotiators it would not reward them with a payment which exceeded the payroll of its Australian business.

Like all airlines, SIA is hurting because of the economic downturn and last week posted its first operating loss in six years.

Flight Centre spokesman Haydn Long said the agency chain and SIA had spent three months in talks trying to seal a 2009-10 incentive agreement.

"In this instance, unfortunately, we weren't able to conclude an agreement," he said.

"The fares will still be available from us, but they are something we won't actively promote."

However, in an email to agents headed "Turn the Screw on SQ", Flight Centre says it is beginning a "full stop-sell" on Singapore Airlines and its subsidiary carrier Silk Air.

The email tells Flight Centre's 4000 sales staff to try to switch clients requesting Singapore Airlines tickets to one of its preferred carriers.

They are told not to offer the option of travelling with SIA and not to market or promote the airline.

SIA has confirmed that it was at odds with Flight Centre.

"We understand Singapore Airlines air fares might not be available for purchase through Flight Centre retail outlets in Australia and New Zealand," the carrier's vice-president for the region, Subhas Menon, said.

SIA's ticket sales plunged 19 per cent during the three months to March 30, driving fourth-quarter earnings down 92 per cent to an operating loss of $25 million.

At the same time last year the world's second-biggest carrier by market value posted a $416 million profit.

Source: http://www.news.com.au/couriermail/s...7-3122,00.html