BRUSSELS, Belgium, Jan. 14, 2005 (PRIMEZONE) -- Following changing market conditions Virgin Express (OTCBB:VIRGY) (Euronext:VIRE) will apply a "zero commission" distribution policy as from the 1st April 2005. All bookings made before that date (regardless the actual travel date) will still be eligible for 9% commission.
Paul Sies, commercial director of Virgin Express, commented: "Virgin Express has always paid at least average commission levels to its travel agent partners. In addition the airline supported travel agents by being the first to ensure that prices offered to the general public via the internet were always equal to those sold through agents. This was chieved by introducing a handling fee for direct bookings and by creating a special booking module for travel agencies on the website."
"However, in recent months most of our competitors have reduced their commission levels to 0%. This important change in conditions in a very competitive market forces us to move away from our previous practices and make some radical changes to our own distribution and remuneration model," stated Sies.
On bookings made as from the 1st April 2005
Virgin Express will no longer pay commissions. However, agencies will still be able to compete. The handling fee applied by Virgin Express for reservations made by direct-booking customers will be increased to E10 per travel file to better reflect the cost of this service. Travel agencies will not have to pay this fee.
In order to stabilise its distribution cost further, Virgin Express continues to develop its on-line services via the SkyAgent booking engine. This booking module offers many advantages to Virgin Express's travel partners:
- the lowest fares, including the exceptionally low "first minute" fares, - a E3 per segment discount compared with GDS bookings, - pre-seating (with or without extra legroom), - and the opportunity to change and manage reservations on-line.
In 2004, nearly 70% of all Virgin Express bookings were made via its website, of which 14.2% were already generated by travel agents. By the end of 2005, Virgin Express hopes to sell 90% of its seats through the web.