A Month After Ukraine Plane Crash, Malaysia Airlines Doubles Commission of Australian Travel Agents to 11% to Boost Seat Sales
By Vittorio Hernandez | August 19, 2014 8:30 AM EST
To help boost seat sales, Malaysia Airlines had offered Australian travel agents doubling of their commission to 11 per cent, The Australian reports. The air carrier, which suffered financially because of the two tragedies involving its Boeing 777 jets within four months, advised the agents that by September all tickets issued in and all travel originating from Australia would enjoy the new commission rate.
Malaysia Airlines planes sit on the tarmac at Kuala Lumpur International Airport July 21, 2014. U.S. Secretary of State John Kerry laid out what he called overwhelming evidence of Russian complicity in the shooting down of Malaysia Airlines flight MH17 as international horror deepened over the fate of the victims' remains. REUTERS/Edgar Su (MALAYSIA - Tags: TRANSPORT DISASTER)
The offer was made at about the same time that the airline's Flight MH17 was hit by a missile believed to have been fired by Ukrainian rebels and crashed into Ukraine, killing an 298 on board the aircraft.
With the higher commission, an Aussie agent would earn over $600 commission for a two-way business class ticket from Sydney to London, via Kuala Lumpur, while the agent would earn about $200 for a two-way economy ticket on the same route.
It's almost double the current 6 per cent commission, still applicable to tickets issued outside Australia. The promo commission rate will only be until Sept 15.
Haydn Long from Flight Centre admitted that bookings with Malaysia Airlines was affected by the mysterious disappearance of Flight MH370 and the crash of MH17. "You would have to assume Malaysia Airlines is trying to reinvigorate interest in its flights out of Australia, in the wake of the two terrible tragedies," Long said.
But even before the two tragedies, Malaysia Airlines has lost $1.37 billion the past three years and was losing $1 million to $2 million a day, The Australian pointed out.
Khanazah Nasional, the Malaysian sovereign wealth funds has offered to buy the remaining stocks from shareholders, but the offer was criticised last week by former Malaysian Prime Minister Mahathir Mohamad, who said the plan was a path to more losses for the air carrier.
"Khazanah has been in full control of Malaysia Airlines all this time. And all this time Malaysia Airlines has been bleeding profusely ... So why should anyone believe that with 100 per cent control Khazanah will not keep on losing," the former PM wrote in his blog, quoted by Channelnewsasia.
He warned that changing ownership structure would only result to huge salaries, allowances and bonuses, but beyond executive and board remuneration packages, not much change could be expected from Malaysia Airlines under an owner regime change.
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