TRAVEL agents will refuse to handle Ryanair ticket sales from May 1st, it was announced yesterday, but the airline reacted by claiming the boycott would not hold.
The decision to withdraw support for the airline was taken by the board of the Irish Travel Agents' Association (ITAA), which said yesterday it had received an "overwhelming mandate" for such action from its 350 members.
However, the airline's chief executive, Mr Michael O'Leary, said a number of travel agents had already contacted him to say they would not support the boycott. Even if one goes ahead, it will not affect Ryanair's sales, he insisted.
The ITAA's move follows Ryanair's decision to cut the commission it pays travel agents from 9 per cent to 7.5 per cent.
The boycott plan sparked a sharp exchange of words between the two sides yesterday; the Chambers of Commerce of Ireland also entered the fray, describing the ITAA's stance as unprecedented and "anti-consumer". It has raised the matter with the Competition Authority.
It is understood the authority will have informal discussions on the matter next week. It has previously investigated industry-wide commission agreements involving the insurance and stockbroking sectors. In the case of the insurance sector the authority issued a "statement of objection" in relation to the agreement. The issue may now go to an oral hearing.
The ITAA said it was disappointed that travel agents had been put in the position of having to cease selling Ryanair tickets to the public, but the airline had left it "no alternative".
"The proposed cut by Ryanair in travel agents' earnings will not be reflected in lower air fares to the public," said the association's president, Mr PJ Brennan. "By reducing travel agents' earnings by 1.5 per cent. Ryanair are in fact, taking a 17 per cent increase in profits at travel agents' expense."
He contrasted the £7,000 average commission which agents receive from Ryanair with the £6.5 million payment made to seven of the airline's directors in 1996.
But Mr O'Leary said he would not apologise for the fact that, as a result of its low fares policy, Ryanair had increased its profits, enabling it to make a bumper payment to directors, give a 10 per cent pay rise to staff, and spend $60 million on additional aircraft.
He said that travel agents were among the major beneficiaries of Ryanair's low fares. The commission paid by the airline to agents had increased from £797,000 in 1991 to a projected £3.5 million this year, a percentage increase of 341 per cent.
He also denied a suggestion that the company was hoping to cause a split in the ITAA. "We wouldn't need to. There are 100 Travel agents out there who aren't members of the ITAA, so why should we bother?", he added.
Mr Brennan said the question of dealing with any members who refused to support the boycott would be dealt with at an extraordinary general meeting of the ITAA on April 24th. He also denied a claim by Ryanair that an ITAA delegation had suggested at a meeting with the company's management last week that, instead of cutting commission, it should increase air fares by £5 across the board.
Mr O'Leary said Ryanair would put on extra staff if necessary to cope with any increase in direct sales arising from the ITAA's action. "What it's going to do is cause inconvenience to the public, but the public will find the way to get lower air fares", he added.
The Chambers of Commerce of Ireland said its air transport users committee would be asking the Competition Authority for its view on whether the ITAA's action was a "misuse of their position in the travel industry".
