Helloworld splits from industry to back QF/EK pact

SO MUCH for solidarity.

Last month’s AFTA submission to the ACCC consultation on the proposed expansion and extension of Qantas’ exemptions from anticompetitive legislation in Australia was a highly welcome (and perhaps long-belated) sign of industry unity – but it appears to have been very short-lived.

The Board of the Australian Federation of Travel Agents (AFTA) – which, to spell it out, includes senior executives from Flight Centre, Express Travel Group, Travellers Choice, Webjet, Corporate Travel Management, Helloworld, CT Partners, American Express GBT and Consolidated Travel – was believed to be wholeheartedly and unanimously in support of AFTA’s submission, which raised a number of significant questions about the three proposed Qantas agreements with Emirates, China Eastern Airlines and Jetstar.

However it’s now emerged that, in contrast to the well-documented issues which have impacted travel agents over recent years such as coordinated commission cuts, the imposition of GDS surcharges, forced migration to NDC platforms and the blocking of agents’ ability to manage refunds, apparently Helloworld Travel believes it “has not experienced any negative commercial outcomes for Helloworld or our agents as distributors, or for any of Helloworld and its agents’ customers” – at least when it comes to the collusion between Qantas and Emirates permitted by the airlines’ existing cooperation authorisation.

That’s according to an explosive letter from HLO CEO Andrew Burnes to ACCC Chairman Gina Cass-Gottlieb which was revealed by Travel Daily this week. Burnes noted that as a major longstanding customer of both Qantas and Emirates, Helloworld had considered the impact of an extension and reauthorisation of the airlines’ existing agreement “and on balance, we strongly believe that this arrangement is beneficial for consumers in Australia”.

Burnes highlighted the opportunity for customers to take advantage of the Emirates network particularly in Europe, Africa and the Middle East to undertake travels to a much broader range of destinations utilising the combined QF/EK network than they would otherwise. “Our customers will also earn frequent flyer points on QF code share flights operated on EK aircraft to many of these destinations, and are then able to use those points for future travel both domestically with Qantas and also to other non-EK service destinations throughout North and South America, Asia and the Pacific Region,” the Helloworld chief noted.

“In my experience and having negotiated commercial agreements with both Qantas and Emirates over the last seven years of my tenure as CEO of Helloworld Travel Limited, I have not experienced any negative commercial outcomes…I believe the reasons for allowing this reauthorisation greatly outweigh any reasons that might be put to disallow it,” Burnes said.

I don’t have any insight into what goes on at an AFTA Board Meeting, but can only imagine the mood when recently appointed Director, Helloworld Executive Director Cinzia Burnes, takes her seat next time. There are also likely to be some decidedly uncomfortable moments for MTA Travel’s Roy Merricks, who holds the second AFTA Board seat allocated to Helloworld. Will he toe the line so clearly drawn in the sand by his company’s 50% shareholder?

With Qantas and Emirates both understandably livid at AFTA’s last-minute submissions raising issues of consumer detriment that the ACCC is now expected to consider, the seemingly impregnable wall of industry unity which saw the Federation finally speak out now has a significant chink courtesy of Helloworld.

Of course we can all imagine the airline goodwill that may flow to Helloworld now that it’s come out so publicly on the side of the carriers, and in opposition to its travel agency colleagues – but the company is certainly playing a high-stakes game by separating itself from the rest of the industry pack on such important issues, which despite the claims in the Helloworld letter, must have literally decimated its members’ and franchisees’ bottom lines.

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