SEVERAL agents have
written to TNW after
being slapped with
a series of ADMs for
cancellations that they
say were made on
requests from their
clients.
Although churning is a
practice frowned upon
in the travel industry,
what about legitimate
cancellations made to
accommodate client
requests? For some
airlines it seems there’s
no difference, and
agents are paying the
price.
David Pegg, md of
Sure Viva Travels,
recently received an
ADM from Etihad for
“excessive
cancellations” –
something he has
never experienced
before. “I’d like to know
what percentage of
bookings is considered
excessive?” he says.
Another agent who
prefers to remain
anonymous had a
similar experience with
Etihad. He explains that
the ADMs were supported
by a spreadsheet listing the
bookings made and then
cancelled. “Unfortunately,
this list also included
examples of where the
customer was sold an EY
ticket and then changed the
date.” He adds that the ticket
type allowed for a change,
subject to a fee, which was
collected. Despite this, the
agency was still penalised for
the cancellation.
According to an Etihad
spokesperson, bookings
that don’t materialise and
generate revenue have
double impact. “On the one
hand, inventory is blocked
from sales, which results
in loss of opportunities,
on the other, the airline
pays fees to the GDS for
every booking made and
consecutive actions taken
on it.” The spokesperson
adds that the airline takes
measures to “observe the
agencies’ actions and curb
such behaviour to minimise
financial impact”.
As for why the list of
cancellations resulting
in an ADM included
instances where a sale
had materialised, the
spokesperson said: “ADMs
are not raised for particular
instances, and are forwarded
to agencies only when they
have exceeded or gone above
the cut-off level.”
According to the airline,
an “industry standard” is
followed when determining
an acceptable level of
cancellations. “Cancellation
levels surpassing the
average percentages set for
the country are considered
excessive.”
It’s not only Etihad that is
levying ADMs that agents
believe are undeserved.
Allan Wolman, md of XL
Rosebank Travel, who was
penalised by Lufthansa,
says clients, particularly
corporates, demand multiple
bookings and quotes, usually
in line with their procurement
processes. “We do not
wantonly sit on our GDS
and book and rebook for no
reason.”
However, André Schulz,
Lufthansa gm for Southern
Africa, says: “The Lufthansa
Group ADM policy is known
to the travel trade. All ADMs
are issued as a result of fare
rules not being observed.”
Airlines say agents are
aware of the limitations on
cancelling bookings and
tickets, but the opposite
seems to be true. “After
44 years in this business I
don’t know what this industry
standard is and it’s never
been communicated [to me],”
says David.
Meanwhile, Iata’s response
is that issuing ADMs related
to cancellations is a matter
for the individual airline.
“From the perspective of
the ADM Working Group
activities, it is not one of the
major ADM root causes and
thus, the ADM Working Group
has not had discussions
relating to the subject,” the
association told TNW.
Otto de Vries, ceo of
Asata, says: “There is a
lack of consistency in the
application of ADMs on all
matters, including so-called
cancellations (or churning).
We agree that, in most
cases, the agent is trying to
help the client, but as long
as there are commercial
risks and costs related to
the practice for the airline,
we can expect there to be a
level of penalties that will be
applied by the carriers.”
“When customers request
bookings and multiple
changes and quotes are
required, what action should
we take? Should we tell the
customer we cannot provide
the level of service for fear of
this type of draconian action
of ADMs for churning?” says
Allan.
Otto says agents must
convey the risks or costs
of churning to their clients.
“If clients book directly,
they would be charged
cancellation and/or change
fees and it would be
completely acceptable.
